PUBLIC POLICY AND ANALYSIS(IGNOU) Unit-21

8/10/2019 PUBLIC POLICY AND ANALYSIS(IGNOU) Unit-21

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UNIT 2 POLICY ANAILUSIS: METHODS ANDTECHNIQUES 11

Structure

2 1 O LearningOutcome

21.1 Introductio~l

2 1 2 Survey Research21.2.1 Types of Survey21.2.2 Survey Methods21 2 3 Questionnaire-Design21.2.4 Pretesting a Questionnaire21 2 5 Sampling Methods

21.2.6 Sample Size Determination

21.3 Computer Simulation21.3.1 A Simple SimulationModel21.3.2 Reasonsfor Using Simulation21.3.3 Limitations of Simulation21.3.4 Computer Simulation

21.3.5 Some Applicationsof Computer Simulations inPublic Policy

21.4 Conclusion

21.5 Key Concepts2 1.6 Referencesand Further Reading

21.7 Activities

After studying this Unit, you should be able to:

Understand the concepts of survey research and computer simulation;Discuss the methodsof collecting data through survey research;Explain the strengthsand weaknesses of different survey methods;Describe the ways of conductingcomputer sim ulati~ns ;andHighlightthe advantagesand disadvantagesof computer simulation,

21.1 INTRODUCTION

The presentday society is an information society. Thissocie tyneeds infoynationon needs,preferences,and behaviour. The government, business,andsocial institutionsalsoneedinformationso that they can meet thepreferences and expectations of individuals.hi this context, information,as processed data, is essentialas an aid to decision-making. The d ti can be either gatheredthrough surveys or generatedthrpughcomputersimgatig?.


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258 Public Policy and Analysis

This Unit provides clear understanding on how to collect data through surveys and computersimulation. For this purpose, choose a method on the basis of the nature of population and itsneeds, and assess the limitations of data collection. The computer simulations are useful to understandthe system that helps in decision-making process. You may prefer to use computer simulations,

particularly when the methods of mathematical optimisation procedures arecomplex. You willlearn a more details on these topics in the rest of this Unit.

21 2 SURVEY RESEARCH

Survey research is the method of collecting data from a sample of respondents, that is, representativeof a target population. It is one of the most common typ s of social research for collecting quantitativedata. The survey is intended to represent characteristics or perceptions of a target population. Itconsists of all objects, individuals, or social units. For example, to know theenvironmental effectsof an industry in a particular location, the target population may consist of ll the individuals living

in and around that industrial area. Similarly, to know the people's opinion on construction of anirrigation project the target population may consist of the potential beneficiaries of the proposedproject and those who are likely to loose land or get displaced. Therefore, the target populationmust be clearly defined.

For a variety of reasons, i t may not be possible for us to elicit the required information from thewhole population. In such cases, we may use a sample that represents the ,target pop~lation. Asample is a fraction of population selected to elicit the information about the population as a whole.For example, a sample of prospective voters is questioned in advance to determine the publicopinion on the candidates or parties contesting the election. Similarly, the government may seekthe opinion of people through a sample survey for evaluating the present or proposed legisl~tion.

21 2 1 Types of Surveya

Normally,before conducting a survey one should decide as tohow the results would be used. Thatis, whether the survey collects data at a single point of time or over aperiod of time, The first typeof survey is called cross -sectional survey, and the second one longitudinal survey,

i Cross - Sectional Survey

Cross - sectional survey is used to gather data on a single population or several populations at asingle point of time. The characteristics of these populations can be examined on the basis of a

number of factors. For example, if a city council is bringing a new legislation on road safety, it maywant to know the o pinion of people before the new po1icy.i~ implemented. Therefore, it maycond~~cta cross-sectional survey among the city citizens. The population groups for this surveymay consist of heavy vehicle drivers, light vehicle drivers, cycle and auto-rickshaw drivers, andpedestiians. he factors could be perceptions on speed limits, type of punishment for road safetyrule violators, and how the money generated through fines should be spent. One may also dividethe population on the basis of their income, educational qualifichions, age, etc. and analyse theiropinions.

ii) LongitudinaI Survey

Longitudinal survey gathers data on a particular population over a period of time to perfit#

comparisons. For example, if the government is introducing anew policy onelectricity billing, billdistribution and collection ina city, it may conduct the opinion survey of its people before and afterintroduction of new policy. The longitudind survey can furtherbe divided into trend studies, cohortstudies, and panel studies.


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Policy Analysis: Methods and Techniques - I

Trend Studies

The trend studies aim zt collection of data at regular intervals through repeated surveys, such as,surveys on unem p loyment, poverty, consumer prices, etc. While samplesare of the samepopulationthey are typically not composed of the same people. Trend studies, may be conducted over a longperiod of time. The researcher can combine data from several studies of the same population inorder to show the trend(s).

Cohort Studies

Cohort studies also focus on aparticularpopulation or sub - groups of a population. They aresampled and sh~diedmore than once, but these studies have a different focus. They study a group,which has experience of an event or a programme or scheme. For example, a sample of studentswho have completed master's degree in Public Policy in 2006 can form a cohort and could bequestioned regarding the utility of the programmein their respective p~~ofessions.Five years latera different sample of the students who have completed their master's degree in Public Policy in2006 can be studied to see any changes in their perceptions. Therefore, a cohort study wouldsample the same population at different points of time. Suppose, if you study the students whohave completed their master's degree in 2008 then it becomes a trend study and not cohort study.

Panel Studies

Panel studies are similar to cohort studies, except that the same individuals are interviewed in eachperiod, whereas in cohort studies only a random sample of the same group (year, age income,etc.) is studied. In Panel studies the same set of individuals serve the control function over a periodof time, whereas in Cohort analysis random sampling is assuined to serve as control function,

assuring similarity of a Cohort by age, education, gender, etc.as

itis

measured in successive timeperiods. For example, select a sample of voters and ask them about their affiliation to politicalparties. Every year thereafter, the researcher would contact the same voters and ask them similarquestions, and ask them the reasons for any changes in their preferences.

The Cohort studies measure net changes over time, whereas the Panel studies measure grosschanges over time. For example, many voters switch their party identificationina given period oftime and it does not take into account the new voters to measure the net effect. Panel studies canyield specific information and extremely useful explanations. But they are difficult to conduct.. Theytend to be expensive; they take lot of time and suffer from attrition rates (attrition occurs whenpeople dropout of the Panel Study).

21.2.2 Survey Methods

Broadly speaking, there are four methods of conductirig survey for collecting data: (a) in- personinterview, (b) telephone survey, (c) mail survey, i d (d) internet survey. Each of these methods hasparticulqadvantages and disadvantages. The choice of a p d c u l a rsurvey method for data collectionshould be justified by its advantages and disadvantages in the context of the purpose for which asurvey is being conducted.

i) In -person Interview: Basically there are three approaches to collect data through in - personinterviewing: (i) informalconversational interview, (ii) general interview - guide interview, and (iii)standardisedformat interview.The informal conversational interview relies on sppntaneousquestions arising from the naturalflow of conversation. D uring this kind of interview, the res~onbentsmay not even know or realisethat they are being interviewed. The advantage of this method is that it allows the people torespond to individual andsituational differences. The questions can be personalised in Focus and


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the communication would be non -threatening, The disadvantage of the informal interview is that itrequires a great deal of effort and time to collect the information systematically. There is alwaysscope to miss some important data since during the conversation uniform questions cannot becovered. Also, the quality of the data depends on the skills of the individual investigator.

Before interviewing the respondent, an interview -guide is pieparedthat contains issues or questibnsto be asked during the interview. It ensures that the data is collected on the sameissues. The guideprovides basic topics or subject areas within which the investigator is free to probe and obtaininformationon the subject. The main advantage of the interview -guide method is that it ensuresthat investigator uses the limited time available in tli best possible manner. The interview will beinoresystematic and comprehensive with focused discussion. This method is especially useful forgroup discussions, where the interview -guide keeps the discussion focused, but at the same timeallows the individual perspectives to be identified. There are some disadvantages of this method.Although,this method overcomes th deficiency of omitting important issues as in informal interviews,still it can inadvertently omit a few important issues. In this method, the investigator can sequencethe questions in his own way or use his own words in putting questions, which inay often bemisunderstood by the respondents and leadto inconsistencies in responses. Also, the reliability ofthe data greatly depends on the skills of the investigator.

When the data needs to be compared and used for furtherstatistical analysis, the data should becollected using a standardised omzat In this method, each respondent is asked essentially thesame questions. The format can contain open -ended questions or closed -ended questions orboth. The questions are sequenced as the investigator asksthem. The advantage of the standardisedformatinterview is that it rninimisesinvestigator's bias by standardisingthe questions being s k ~ dof each respondent. The interview is systematic and data comparisons become easier. Also,

questions will be highly focused and reduces the time duration of the interview. This method hasone disadvantage. The method does not allow the interviewer to pursue issues that may emergeduring the period of interview.

Generally, the in -person interviews are the most expensive formof survey research. However, theresponse rates are very high and the researcher obtains more detailed data through this method.Also, in -person interview methods need larger and highly trained persons to collr.ctthe data whencompared with other methods. The investigator's personal bias also forms one of the drawbacksof this method. A numherof sampling methods are used to draw samples from population understudy.We will discuss these methods in section 21.2.4 of this Unit.

ii) Telephone Surveys: Telephone surveys offer a comparatively fast and low -cost alternative toin-person interviews and are particularly useful when the population is large and geographicallydispersed. One of the drawbacks of this method is that it is limited to persons with telephones.Also, if the telephone book is used as the source of names, persons who have telephones but theirnames are not listed in the book are omitted from drawing samples for surveys. Another majordisadvantage is that manypeople'areswitching over the mobile phones, which is presented in Unit 24.

To draw a sample ofrespondents, the investigator starts with a sampling frame containing phone.numb s,chooses oneunit fromthis frame, and conducts an interview over the telephone, eitherwith a specific person at the number or anyone available at that number. This process is continued,tillall the sample units in the samplingframe are interviewed. Another technique called random -digit diaIing permitstelephone calls to be made within specific geographic areas without the needfor the list of telephone numbers. However, the drawback of this method is that the interviewerdials a number not knowing whether there definitely exists a live connection at that number, orwhether it is a business: hospital or household. It is always better to combine these two methods.First, the interviewer uses random digit dialling to prepare an initial list of random numbers. Using


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Policy Analysis: Methods and Techniques - I I 2

a random number mechanism (we will discuss random numbers in section 21.2.5 of this LJmit .telephone numbers are then taken from this list to produce a final set for the sample to be covered.The greatest advantage of telephone survey is that it is timely and costs less than in-person interviews.But the disadvantage is that the telephone survey requires se~reralinterviewers to make telephonecalls if the survey is to be completed withina reasonable time period. These days most of thecommercial firms use telephone to conduct surveys. Properly conducted telephone surveys yieldhigh response rates. However, the interviewer should keep the number of questions to be askedto the minimum and simple. Researchers generally believe that they get the best response ratethrough in - person interviews. But studies show that the response rates have been decliningpa

r

ticularly from urban areas andwith high - income groups. Studies have shown that telephoneinterviews yield about as representative a sample as in -person interviews.

iii) Mailed Survey: In this method apre - designed questionnaire is mailed to the respondents,who are expected to complete and return the questionnaire. The main advantage of mailed survey

is that it is substantially less costly than both in-person and telephone surveys. order to improvethe response rate, the questionnaire is developed with closed - ended questions that make the data

analysis relatively simple and quantifiable. Responses can be directly compared and easilyaggregated. It is commonly observed that the response rates in mailedsurveys are low. A highnon - response rate sometimes results in non - representative sample.,Thenon - response rates canbe caused by many factors, which include non -availability of respondents, or refusal to participatein the survey. A variety of techniques can be used to improve the response rate. For example, afollow - up of the mail can improve the response rate. Also, the questionnaires that are brief aremore likely to be completed. Some kind of attraction can be.madeto get the attention of therespondents to fill and return the questionnaire. For example, the questionnaire can have copy of

an introductory letter from aprominentperson, and respondents can be given token gifts. Anotherdisadvantage of mailed questionnaires is that the respondents cannot fit theirexperience and viewsin the pre-determinedcategories, This can distort what the respondents really mean by limitingtheir choices. To partially overcome these difficulties, open -ended questions are often added tothe questionnaires. gain open -ended questions are generally of limited value on mail surveybecause they depend entirely on the respondent to answer fully and do not provide an opportunityto probe or clarify unclear answers.

iv) Internet Survey: A more recent innovation in survey research methods is the use of Internettechnology. There are two ways of contacting respondents through Internet. First, the researchercan mail the questionnaire usinge- mail facility In this method, you need to collect all the e - mailaddresses to which you intend to mail the questionnaire. In the second method, the researchessimply posts the questionnaire in a web page with arequest to the respondents to fill them. Therespondents who access that web page download the questionnaire and send the filled - inq~~estionnaireusing either e -mail facility or postalmail. The respondents can also send their responsesby simply filling the questionnaire on-lineusing the web page.

The Internet surveys s~lbstantially du c ethe cost and time of the surveys. The major limitation ofthe Internet mails is that the population whom the Internet survey is aimed at should have Internetconnectivity. Otherwise, there is a threat for sampling bias. If the target population consists ofcomputer users, the sampling bias may be minimal. Therefore, the Internet surveys are ideal forcollecting data from networked people and with e - mail addresses.

21 2 3 Questionnaire -DesignA questionnaire is a format containing questions arrangedin a sequence to elicit infortnationfromthe respondents. A questionnaire can be used for in -person interviews, or mailed surveysor Internetsurveys. In a way, the questionnaire is the heart of the survey research. The researcher should be


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clear i n h i s h e r mind what information is needed and from whom?Thisis crucial whether thequestionnaire is administered by the interviewer or mailed or posted in a web page. Also, providesorne introduction descl-ibingthe nature of the questionnaire and the objectives of the survey.Mailed surveys and Internet surveys should have a brief attachment introducing the survey and

requesting the cooperation ofthe

respondentin

filling the questionnaire.Types of Questions: Each question or set of questions should be designedand carefully worded.They should have clear instructions on how the respondents have to fill the answers. For example," What difficulties are you facing in your business? Check the reason that applies in your case. " ,

Closed-ended questions limit the respondent's answers to the survey. The respondents are allowedto choose fromeither a pre -existing set of dichotomous answers, such as, Yes/No, TmelFalse,or~nultiplechoice responses with an option for 'other 7 to be filled in or ranking scale responseoptions (like very important, somewhat important, not too important, not at all important). Thefollowing are some examples of closed ended questions.

i) Educational Qualifications:a) Illiterateb) Below matriculation

C) Matriculation and above, but below graduated Graduate and above

ii Which TV channel would you generally prefer:a) Sportsb) Entertainment/music/movies

c) Newsd) Spirituale) Other (please specify)

iii The inost important problem that our country is facing in the current year is (rankthe importance of each of the following reasons you perceive strongly):

I strongly I somewhat I have no I somewhat I stronglyagree agree opinion disagree disagree

Poverty 1 1 1 1 1Population 1 1 1 1 1Corruption 1 ) 1 1 )Terrorism 1 1 1 1 111 iteracy 1 1 1 1 1Employment 1 1 1 1

The advantage of closed-ended questiollsis that they are more easily analysed. The response toevery answer can be quantified by assigning a pre- coded number so that statistical analysis becomeseasier. Since closed -ended questions are more specific and convey similar meaning. They facilitatecomparisons of responses. The time taken by arespondent or interviewer is limited. Because ofthis reason, the response rates are higher in surveys that use closed-ended questions than open-ended questions. e

The advantage of open -ended questions is that they allow respondents to include more information,including feelings, attitudes andunderstandingof the subject. However?the response rates may nothe encouragi12gwhen open-endedquestions are used.


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Policy Analysis: Methods and echrziques - 263

Wording: The wording of survey questions is a tricky one. It is difficult to develop questions withproper words that c6nveysame meaning between the researcher and the respondents. To write

effectively communicating questions the researcher should keep in mind the following:Questions should be written in simple languageand avoid complex or long - winding sentences.

e Questions should be kept short and simple.e Questions should be specific and focused. Avoid general questions.e Avoid questions that are sensitive and hurt the feelings of respondents.

Order of Questions: The sequence of questions is another important consideration in developinga questionnaire. The following points should be kept in view:

Easier questions that the respondent feels that helshecan respond should be at the beginning.For example, you can put questions like name age, qualifications, sex, etc. at the beginning ofthe questionnaire.

a Sensitive questions (if any) should be avoided at the beginning of the questionnaire.Do not put most important questions at the end of the questionnaire. Many respondents maynot answer the questions appearing at the end because they are likely to develop fatigue bythat time. . ,The questions should be ordered in such a way that corresponds to the respondent's naturalway of thinking.One should be care f~~lwhile designing contingency questions like 'Eyour answer is yes to theprevious question', etc.

21.2.4 reytesting a QuestionnairePre-testing of a questionnaire is essential to improve the effectiveness of a questionnaire for collectingdata. Before sending the questionnaire to the r~spondentor the interviewer meets the respondents,the draft questionnaire should be tested for its effectiveness with asmallgroup of people sirnilwincharacteristics to your ultimate sample. Pr?-testingcan help you determine the strengths andweaknesses of your survey concerning question format, wording, and order. There is no hard andfast rule to decide the number of respondents for pre - testing. However, it is ideal to have apre-test sample of 1 and not more than 30.

Before conducting a survey, you must choosea

representative sample of the population understudy. Unless your target population is very small, it is not always possible to collect the data fromall ~neinbersof the population. A subset of population that contains all the characteristics of thatpopulation is called a sample. In that case, all the inferences drawn from the sample are probablyapplicable to the entire population. Therefore researchers generally survey a sample list ofrespondents from a population, which we call a sampling frame. There are a numberof salnpling~nethodswhich can be classified into: (a) probability sampling methods, and (b) non - probabilitysamplingmethods. These are also sometimes referred as random sampling methods, and non -random samplingmethods respectively.

Probability Sampling Methods: In the probability sampling methods each unit or itelm in thepopulation has a chance of being included in the sample. This metllod of sampling reduces thesampling errors and normally we say that the sample is an unbiased sample. There are severalmethods of probability sampling.In this Unit, we will discuss the following methods of probabilitysampling:


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Policy Analysis : Methods rzd Techniques - I 265

iii)

iv)

sample unitthe rest of the s a ~ n ~ l e u n i t sare a~~tomaticallyselected. This may lead to not givingequal chance to all population units in the sample.

Stratified Sampling

this method a heterogeneous population is divided into stratums.Simple random scamplingand systematic sampling methods are ideal if you have ahomnogeneouspopulation. However,if you have heterogeneous population like malelfernale ~ ura llur ba n iteratelilliteratelowincomehigh incomegroups, etc. and you want to have a representative sample fromeach ofthese stratums then you can choose the method of stratified random sampling. The stratifiedrandom sampling is in fact a simple random sampling of each stratum of the population. Forexample in a study of different income groups, asiinple random sample may be drawn foreach income group (either in proportion or dispropol-tionto the stratum population size). Themain advantage of stratified random samplingis that since the random sample is drawn fromeach stratum of the population, this method is more representative and thus repres.entsmoreaccurately the characteristics of the population. The drawback of the stratified samplingisthat it is often clifficult to prepare a list of population membersfor each stratumsince the listsmay not be readily available.

Cluster SamplingI cluster sampling we divide the population into smaller groups calIedclusters and thenselect samplesrandomly from oneor more groups (clusters). Here we assume each cluster ofpopulation will have all the characteristicsof the population as a whole. The cluster samplingisfnore appropriate in geographical studies. For example, suppose you are conducting asufveyin Mumbai. Instead of spreading the sample to the whole geographical areaof Mulnbaiyou can divide the city into say 30 blocks, select a few blocks (say 3 or 4) and then select arepresentative sample fromeach block. Selection of groups or clusters of elements ratherthan ihdividual elements is regarded as a more practical approach to surveys it samples.Howevel; the accuracy of the survey may decline if the clusters are not representativeof thepopulation characteristics. Sometimes, the cluster samplingis also called s two-stage sampling.

Multi - stage Sampling

Multi-stagesampling is aigeneralisationof the cluster satnpling. I n cluster sainplingwhat youhave observed is a two -stage process. In the first stage divide the popqJationinto a number ofclusters, and in the second stage fromeach of the sampled clusters you choose arepresentalivesample. Multi -stage sampling is, thus, carried out in a number of stages. Progressively smaller

population is selected randomly at each stage. Further, at each stage of the ~nultistagesamplingyou can use a suitable method of sampling (say stratified, simple random, o r systematic, orcluster). For example, if you are conducting a survey covering all the geographical area ofIndia. You can choose a representative sample of states in the first stage, and in the secondstage you can select a representative sample of districts fromeach state, and so on. The mainadvantage of multi -stage sainpling is that it reduces the costs of data collection when thesurvey is in -person. The drawback of the multi -stage sampling is that if the sampling unitsselected at different stages are not representative, the findings of the survey have a lowervalue in terms of their generalisability,

Non - Probability Sampling Methods

The non -probability sampling methods are widely used as a case selection method in qualitativeresearch or for preliminary and e x p l o r a t o jnature of quantitative studies where randomsampling is too expensive. However, the probability methods of sampling are always preferable

nhkn-probabilitymethods of sampling are not a substitute to the former. In this section,


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266 Public Policy arld Analysis

w ecover three non -probability samplingmethods, namely, convenience sampling, judgmentsampling, and quotasampling.Convenience S~mpliizg tlissampling, the researcher selects the samples that are convenientor on the basis of availability. For example, in conducting opinion polls people who arecoming out of polling booth and are willing to talk are chosen for interview. Mail -in surveysinnewspapers, magazines or TV are other examplesof convenience sampling.

udgment Sampling: In judgment sampling, the researcher interviews a panel of individualsknown to experts in afield. This sampling inethodisalso sometimescalledpurposivesampling.The sample is selected entirely on the basis of researcher slexpert s judgment on thecharacteristics of the sample. The consumer price index is based on a judgment sample. Inthe absence of representative data or where it is difficult to establish the universe for a sampleone may resort to judgmentsampling.

Q~lota ampling Quota sampling is similar to convenience sampling, except that the

pl-oportionalityof each stratum is preserved. The samples are selected on the basis of someparameters like sex, age, region, income, etc., in order to make a representative sample. Theresearcher then chooses a fixed quota from each of the sub -groups. Unlike stratified randomsampling, n quota sampling the samples are not drawn randomly buta fixed quota is chosen.For example, a market survey may cover 5 market centres of a city and from each marketcentre a fixed quota of 50 consumers can be interviewed. Their selection is not done randomly,but only according o the researcher's convenience.

21.2.6 Sample Size Determination

How large the sample should be is a question that arises at the planning stage of any survey. If youtake a larger sample than required then it results in wastage of resources because you will not gainany additional infolmation.On the other hand, if you have too small a sample than required, youmay not get reliable results, and hence they are of no practical use in making agood decision. The ,main objective it1 samplingis to obtain a desirable accuracy and desirable confidence level withminimum cost. All probability -sampling methods ensure representative sampling. Also, technicallyspeaking, a sample size is related to the confidence level or precision level. The typical confidencelevels are 95 per cent, and 99 per cent and typical precision levels are 5 per cent, and 1 per cent.The discussion on how to estimate the sample size is not covered here since it is beyond the scopeof this Unit.

COMPUTER SIMUL TION .Simulation is amelhod of solving problems in decision-rn


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268 ublic olicy and Analysis

Where AC = Average Cost

With these simulations as apolicy analyst you may understand that withmarginalcosts per studentyou are able to achieve greater economies of scale for additional enrolments. You may concludethat higher level of enrolments in distance education will result in higher level of cost efficiency.

21.3.2 Reasons for Using Simulation

Simulation is one of the most frequently used techniques for management decisions. Linearprogramming problems, input -output analysis, cost -benefit analysis, and forecasting techniquesaresome of theexamplesof using simulation.While conducting cost -benefit analysis or solving alinear programming,problem,the policy -analyst may try to explore different policy alternativesincorporating different perceptions and attitudes about risk and uncertainty. Here, the policy

analyst's goal is to clarify the issues and put forward the consequences of a variety of alternatives.This will help the decision makers to choose one of the alternatives that match their values andobjectives.

Generally, simulation is used in conditions where mathematical formulationand solution by the useof models are not feasible. Simulation has been used in numerous decision -making problems,ranging from inventory and queuing management to energy policy modelling. Also, simulations areused to analyse large and complex real world situations that cannot be solved by collventionalmathematical models. Another advantage of simulation is+that it is possible to experiment og asystem withbutexposing the organisation to red world dangers. By exploring the changes in a realworldsystem through simulation you can learn how to improve the system without ttying both badand goodproposals on hand.

The decision maker's past experience andintuition are significant factors for successfuIdecisions.Often they have to manage complex systems. Simulation aids the policy decision makers pastexperience and intuition that ultimately may result in a successful decision.

21.3.3 Limitations of Simulation

In spite of several advantag6sof simulation, there are some limitations in using simulation fordecision making. Some of the drawbacks are:

e Simulation by itself does not provide the answer to a problem. It only provides a techniquefor evaluating possible answers.

e Simulations do not generate optimal solutions like other mathernaticalmodels.. It is only a trialand eirorapproach that may produce different solutions.

The simulation for probabilistic systems Susceptible to sampling error.

The development of a large sim~lationmodel can beexpensive and can take longer time. Forexample, it takes years to develop a good corporate planningmodel.

21.3.4 Computer Simulation

With the advent of computers, simulation models are yidely used to gain information useful fordecision -making. Computer spreadsheet software like MicrosofttExceland Lotus 1-2-3 are used,for fmancialsimulations. The power of these spreadsheets is to do " what if' analysis. The spreadsheetsalso have a random nurhbergenerator that supports probabilistic simulations. We will give (section


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Polic y Analysis: Methncls and Teclirziques - 27 1

better ones at new locations. The recommendations resulted in annual cost avoidance of $1.2nill lionsand accu~nu lated etcost reduction of about $2.3 millionsover a 7 -year period.

21.4 ON LUSION

This Unit introduced a numberof methods forconcluctings~~~-veysused frequently in policy analysis.You have learned the differences between cross -sectional surveys and longitudinal surveys. TheUnit attemptedto answer questions, such as, What is a sample and population? Why samplesshould be drawn in such a way that they represent all the characteristics of the popplation'? Whatare the considerations in deciding a sample size?

Four methods of survey are discussed. These are: In -person interview, Telephone survey, Mailsurvey, and Internet survey. Each rnethodhas its own advantages and disadvantages. After goingthrough this Unit, you should by now confident of choosing any of the methods sulta6lefor your

Survey. These days the nailedsurvey and Internet survey are gaining much importance beca~lseof

their cost-effectiveness, time saving, and advancements in the application ofinfo1111ationtechnology.

The questionnaire -design is another important aspect of any survey. Some guidelines are providedin designing questionnairesthat will be helpful in improvingthe response rates.

The sampling methods can be classified into: probability sampling and non -probability satnpli~zgmethods. The probability sampling methods are based on the equal chance of each populatiofiunit ,getting included in a sample. The non -probability methods are not in support of representativesamples, but they ar~of tenused because of theirconvehience and there is no other way of selectinga sample for conducting a survey.

v

this Unit, you hav earnedwhat is simulation, and why do you need simulation in pdicydecisions.'1n additivean analysis of advantages and drawbacks of simulation is also provided. These will helpyou to understand before actually using simulation. Two typical examples are given to provide a ,conceptualframework for simulation models. You can either use the general-purposecomputerlanguages like FORTRAN, Pascal, CIC ,etc. or special purpose simulation languages like GPSS,S L e M , GEMS, SIMSCRIPT, etc. However, each one of them has it's own advantages and

.disadvantages. I

21.5. KE Y CONCEPTSH

Cluster Sampling : We divide the population into groups called clusters and thenselect sample units randomly f r o ~ none or more clusters. Thismethod is also called two -stage sampling.

Cohort Studies : Cohost studies focus on the same population over a period oftime, but the difference is that the samples are drawn from thesame group, which has experienced an event or participatedin a programhe.

Convenient Sampling In this method of non-probability sampling, the sample n tsare selected according to the convenience of the researched

interviewer.Judgment Sampling : In this non -probability sampling method the samples are

seltctedaccording to an expe~'s/sesearcheris judgment, whichperceives that the sample units have all the characteristics ofthe populatian of the universe.


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Po1ic:y Alzcily sis: Methods arzd Teclzniques- 273

Tcothari,C.R., 1989, Resea~*clz et lodology: Metlzodand Techrziques,Wiley Eastern Limited,New Delhi.

Monarchi,David E., Thomas E.Hendrick,and Donald R.Plane, "Silnulationfor Fire DepartmentDeployinentPolicy Analysis " ,Decisiorz Scierzces,January, 977.

Sadhu,A.N. and A. Singl~,1980, ResenrclzMethodology irzSocial Scierzces,Sterling PublishersPrivate Limited, New Delhi.

Shenoy,G.V.S., et.al, 1 983, Q~lnrztitative ecl~rziques,for~ ~ ~ z u g t i r i a lDecision Mczkir?,g,WileyEastern, New York.

--I ) When are si~nulation nodelsare more appropriate tl2ar-1 p tiinisationmodels? Discuss.

2)Discuss the advantages and disadvantages of general-purposeco~nputerlanguages and speciallmiposesimulation languages for conducting simullations.

3) Consider the following total revenue function:

R=45 0.5Q2 where R is the total revenue and. Q is the Quantity sold. .

a) Using optimisation concept (discussed in Unit22) lind out the val~ieof Q that 111aximisesR.17 Snppose yo11do not know the differential calculus, how do you solve the aboveproblem -

using a computer? Explain the mode of analysis perforined.

4) Discuss t h e differences between trend studies, cohort studies, and panel studies with suitableexalnpjesof policyanalysis. Whatsirethe Ii~nitationsf panel studies?

5) Discuss the ~neri tsand drawbacks of various methods of survey. Wily re rnaileclsurveysand Internet surveys gaining ilnportance thesedays ?

6 ) Why are probability -sampling methods preferred to non -probability sampling methods?Discuss.

7) What are the issues that yo11consider while designing a questionnaire? Is it importantto havea larger sample size? Discuss.


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Random Number Table

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P~tb l i c Policy and nnlyy

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PUBLIC POLICY AND ANALYSIS(IGNOU) Unit-21