Arba Minch University

CHAPTER ONE
1. Introduction
The level of income for workers of labor is not always balanced with their expenditure.
This leads to on assumption that their must be some another factor which fluctuates the
expenditure expected from the given income.

As an introduction for this case study income is not only salary of the workers rather it
includes a supply from another’s source such as support from the family hood to show
how the expenditure differs among workers with the source salary. The term mentioned
above (expected expenditure) is the amount expended only from salary.

Our research is intended to estimate the relation ship of the two economic terms from
sampled workers of Arba Minch Textile Factory.

1.1 Back ground of the study

Arba Minch textile factory was established in 1991 G.C with the aim of satisfying the
enormous need for polyester-cotton blended fabrics in the country. The textile factory has
staff of more than 400 experienced managers, engineers, accountants, technicians,
equipment operator and others.

1.2 Statement of the problem

The problem for these case study lies on level of expenditure for workers of the factory
who has the same level of income is very different with regard to sex and working
department. This indicates there are factors out of salary which varies the money they
expend on.

The second visible problem is the items for which purpose the workers expend. Their
money differs incidence to sex and age group
The third constraint in analysis of these variable is expenditure cross classified by age
group i.e. amount of expenditure for the alternative items is shifted to the same age group

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and this case study we have try to clarify why different age groups spend their money
only on selected items.

The last constraint that should be taken more emphasis to be explained in this study is the
aggregate level of income for spending money. In addition to this we have approve the
idea of level of money for determining the interest of the consumer how much he should
spend.

1.3 Objectives of the study

For several reasons and dependency the level of income is expected to have influence of
expenditure. The objective of the case study can be classified as a specific and general
objective regarding to the factors introduced on the analysis.

General Objective
The general or the overall objective is to know how level of income of the worker
influence the level of money they expend on different goods and to show the variation
income from different working groups cause consumption expenditure with regard to the
dummy variable sex, age group, religion and education status.

Specific Objectives
Investigate the relationship between incomes and consumption expenditure based on their
function.
- Demographic variable creates items which their money expended to
- To study about the general behavior and factors associated with the two basic
economic variables.
- To put conclusion and recommendation regarding income and expenditure.

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1.4 Significance of the Study

The major objective of this research is to show the relationship of statistical methods,
economic variable and demographic factors. But the significance of this case study is to
predict and direct for workers who has the same distribution of the listed variable how to
spend their money in accordance to level of income and to give assumes for a valuation
of their expenditure on ordinal items they consume. Significance is to deal with the level
of saving for workers to maintain their consumption and to direct for workers saving
Minimize their recreational expenditure for future maintaining of 1 st order consumption
commodities.
Reason for selection of this topic
 Since analysis of income and expenditure is the hottest issue in developing
countries especially in Ethiopia.
 Since it affects social, economical and political issues of a country.
 To know the income and expenditure of the workers.

1.5 Scope of the study

The research project was conducted in Arba Minch textile factory at Arba Minch town.
The study focuses only on the selected sample of workers from Arba Minch textile
factory and it will give attention to analysis of income and expenditure of workers.
Even though the study was carried over the selected a sample workers, the result of the
study was generalized for all workers of Arba Minch textile factory. Who are working at
Arba Minch textile in this year (2002 E.c)

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1.6 Limitation of the study

As a junior research it will tried to include all the objectives of the study. The major
limitations
Were:
1. The sample size is not large enough as compare to the important economic
variable.
2. The respondents do not have the exact or registered amount of money for the
expenditure variables..
3. The time given to draw the proposal and research was not sufficient.

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CHAPTER TWO
2.1 Literature Review of Income and Expenditure
A key component of any economic models is the assumption it makes about the way
people be have, behaviors assumptions the motivation of individuals. So we can
understand cause and effect model of macro economics. A considerable more
important question from the macro economic view point is how much the personal
sector including house holds and workers actually receive incentive of income. This
quantity is monthly measured by the amount of many in cash.

Rather to this, another term which commonly take the some value with income i.e.
transfers are those payments that do not arise out of the current productive activity.
Thus pension’s welfare payment and unemployment benefits are example of transfer
payment. The lost economic variable has no commonly known feature for its
transformation due to the ability of current productivity, while income is temporary in
reference to time. Thus, the level of personal income is important because it is a
prime determinant of house hold expenditure and saving behavior.

Personal income is a useful measure because it is available monthly for items which
money expended to the monthly personal income data are used as a guide to the
behaviors of different household expenditure, not all personal income is available for
spending by house holds but disposable personal income which is the amount house
holds have available to spend or save.

Personal expenditure for consumption of house holds is the amount of moneys

expended to personal consumptions which consists of both durable and non durable
goods and services. Examples from durable goods are automobiles and furniture.
And nondurable goods are like food, fuel and savings. Education payments are ports
of services. As economic variable expenditure usually considers the money expended
to nondurable and service goods.

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2.2 Completing An Income And Expenditure Statement.

An Income and expenditure statement is similar to the form you probably completed
to get the very debts we all face today. The purpose of the form is two fold
(www.Debt24.com)
a) For you to calculate how much Money you need to live on.
b) To indicate how much money you can set a side for your creditors
The form has four parts
1. INCOME
Total income (including any spouse). The statement can be a joint proposal for
couple.
2. Living Costs
Every expense but excluding any debts i.e. your weekly rent would go in this part
but not any arrears. A monthly hire purchase payment is not a living expense the whole
balance is a debt.
3. Priority Debts.
4. Non-priority Debts.
Some guides to completing the statement are
.use monthly or weekly figures through out the statement. They do not mix the two.
. House keeping
Quarterly Bills
Add together your last 4 bills (being, one year) then divide by 52 if you are using
weekly figures or divide by 12 if you are using monthly figures.
.Clothing
.Telephone
2.3 Manage income and expenditure
Effective cash flow management is as critical to business survival as providing services
or products. Below are some of the key methods to help to reduce the time gap between
expenditure and receipt of income.

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2.3.1 Customer management

 Consider offering discounts for prompt payment
 Negotiate deposits or stage payments for large contracts.
 Consider using a third party to buy your invoices in return for a percentage of
the total
2.3.2 Supplier Management
Ask for extended credit terms .Giving your suppliers incentives such as large or regular
orders may help, but make sure you have a market for the orders you are placing.
Alternatively consider reducing stock levels and using.
Just –in-time systems.
2.3.3 Taxation
It is liable for several different taxes including income tax, VAT, business rates and
stamp duty. It is important to keep good records to help you calculate your liability and
complete your returns accurately.
2.3.4 Asset management
It is good consider leasing fixed assets, e.g. equipment, or buying them on hire purchase.
2.4 Cash flow Management
Cash is the oxygen that enables a business to survive and prosper and is the primary
indicator of business health. While a business can survive for a short time with out sales
or profits, with out cash it will die (Manage accountants web site (PDF)). For this reason
the inflow and out flow of cash need careful monitoring and management. The principles
of cash flow forecasting income and expenditure.

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CHAPTER - THREE
3. Methodology
3.1 Sampling Frame
The target population was all staff Arba Minch textile factory workers in Arba Minch
town. The sampling frame is the list of workers in this particular construction. There are
37 offices of Administration department, 102 office of production and technique
department and 34 office of trade and finance department. Totally there are 173 workers
from all departments. The reason why we focus on all those departments is that to
minimize the variance and since we consider them they will give us accurate and reliable
information for the study.

3.2 Sampling Design

The precision of a sample estimate of the population mean depend not only up on the size
of the sample and sampling fraction but also on the variability or heterogeneity of the
population. A part from the size of the sample ,therefore, the only way of increasing the
precision of an estimate is to devise sampling procedure is stratified which divide the
population in to L classes, based on the behavior of the population, and drawing a sample
composed of L random samples one each from the different classes. The class in to which
the population is divided are called strata so that stratified random sampling is a sampling
plan in which a population is divided in to mutually exclusive and exhaustive strata, and a
simple random sample of nh elements is taken separately and independently with in each
stratum.

Benefits of Stratified sampling

Stratified random sampling had its own advantage on this hot issue because it uses to
keep homogeneity of the population to achieve minimum variability among the
populations. In stratifies sampling unlike the sample random sampling the sampling error
depends on the population variance existing with in the strata but not between the strata.
For this reason it pays to create strata with low internal variability. It follows that the

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more homogeneous the groups, the greater the precision of the sample estimate In general
the procedure of stratified sampling is thus intended to give a better class-section of the
population than that of unstratified sampling. We use stratification as we stated before, to
keep homogeneity of the population and for separate estimation

3.3 Method of Data collection and analysis

This chapter contains all process of data collection and data analysis. For most of the
research and case studies data collection and organizing is a basic part for further
discussion and interpretation. This chapter will give a short summery about the collected
data, to which place sampling was done and how the collected information was coded to
feed in computers soft ware called SPSS.
Generally the purpose of this part is to give highlight about the following three steps of
data collection and analysis i.e.
-Data collection
-Data organizing
- Analysis and interpretation

3.3.1 Data Collection

As previously mentioned in chapter one the necessary data and information was
collected on the three workers groups of Arba Minch textile factory. It was mentioned
that sample size for this case study is 47 from registered workers in the factory.
The choices of data collection mode are
1. Mail
2. Direct observation
3. Use of existing registers and records
4. Personal interview or group administration is related directly to the sample frame,
research topic characteristics of the sample, available staff and facilities it has implication
for response rate, question form, and survey cost.
Based on the origin of data, statistical data or any other types of data can be classified as
primary and secondary data. Primary data refers to data collection by the investigator
surveyor for the first time and secondary data refers to the data collected by another

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investigator before and as a document or already obtained from compiled files that may
or may not be published.

For the time being intended to use both primary and secondary source of data. Each has
its own contribution in this survey. Secondary data, for instance, administrative record of
the cooperation is used to know the total number of population in each strata. From
primary source of data we used self administered questionnaires which are now a day
modern method of data collection system with so many advantages. In addition to the self
administers questionnaire we use interview for those who are illiterate.
There were about 17 necessary and essential variables in the questionnaire but some of
them were included for simple adsorptive statistics the total variable are;
1. Sex 2. Age
3. Religion 4. Education status
5. Employment condition
6. Working department
7. Monthly salary
8. additional in come
9. In come support
10. House rent expenditure
11. Average monthly expenditure
12. Water rates expenditure
13. Gas expenditure
14. Recreational purpose expenditure
15. Electric expenditure
16. Total expenditure
17. Monthly salary (wage)

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3.4 STAGE of Stratification

Due to the nature of the population, time constraint and other factors are enforced to
apply single stage stratified random sampling having three strata namely
Strata 1. office administration department.
Strata 2. production and technique department.
Strata 3. trade and finance department.

STUDY POPULATION
Population is defined statistically as the totality of all subjects having certain common
characteristics that are being studied. It is the collection of all the units or elements under
investigation. Which consists of a specified type of persons or objects to over a given
space and time.
This study has defined two types of population namely literate and illiterate.
Literate are adult pupil who can at least read and writing in the Arba Minch textile
factory and illiterate are those who can not read and write. .

3.5 SAMPLE SIZE DETREMNATION AND RESULT OF PILOT SURVEY

Of many issues involved in sample design, one of the most common questions poses to a
survey methodology is how big a survey sample should be?
As we know too large a sample implies a waste of resources and too small a sample
diminishes the utility of the results. There fore appropriate sample size is one of the
means of gaining high precision. As we mentioned above we are going to use stratified
random sampling.
First to determine sample size need to conduct a pilot survey since there is no previous
result and difficult to guess the distribution of the population which is done by subject
matter specialists experts. A pilot survey is used to determine sample size and check the
appropriate usage of questions through the main variable. Then based on these prepare
the questionnaires to the selected sample and get the proportion of samples so that could
use the formula for sample size determination (see after the next topic)

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HOW WE GET THE PARAMETERS

In the case pilot survey was used to know the value of the parameters. The pilot survey is
the dress rehrisals and like theoretical dress rehearsal, it will have been preceded by a
series of preliminary tests and trials (Moser, 1950 survey method in social investigation)
First must have a series of question or variable and decide the sample size of pilot survey
in each Stratum and deliver the questions to the selected respondents, after gathering the
responses analyze the estimator of the parameter so called p h, qh. Suppose that the mean
or proportion of each subdivision or strata is to be estimated with a proportions f h is
know, thus order to make v(yh)=v if this is hold to every subdivision.

n= max if fpc ignored

fhv other wise

that is several of the most important variable are chosen and sample size are calculated
for each of these variables .the final sample size chosen might be the largest of these
calculated sample sizes then as a compromise measure the median or mean of the
calculated n’s might be taken. If have three variables, then will get three sample size.
Implies that choose the maximum based on our cost, time or mean and the median of the
calculated sample size. Mathematically

Sample size after arranging in descending or ascending order

Note that the value of relative margin of error or absolute error ( ) and confidence level
are determined by the survivor as appropriate. In a sense that, never get from the pilot
survey. It is determined on the basis of time, cost and the precision needs.

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Steps in pilot survey

I. Select three questions from the questionnaire those are most interesting and
common.
II. Deiced pilot survey size on the basis of time, cost and the placement need.
III. Distribute these three questions to the respondents randomly and collect it.
IV. Analyze the parameter that want to estimate the total sample size.

RESULT OF PILOT SURVEY

Since there is no previous study result so decided to conduct pilot survey in order to
determine the actual sample size and a major purpose of pilot survey is to check whether
the organization and arrangements of the survey actually work satisfactorily. We select
three questioners or variable from the prepared questionnaire and distribute for 10
workers.
1. Sex
 Male  Female
2. What is your employment condition?
 Perm ante  temporary
3. Do you have income support?
 No  Yes
Then after coding the response get the results:
P11= the proportion of workers who are male from
Stratum 1 (office engineering and administration department)
P11= number of males =8 = 0.8
Total 10

q11= the proportion of workers who are female from stratum 1

q11= number of females =2 = 0.2
Total 10

P12 = the proportion of workers who are temporary

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From stratum 1 = #of workers who are temporary

Total

= 0.5

q12= the proportion of workers who are permanent from stratum 1

= workers who are permanent
Total
= 5 = 0.5
10

P13 = the proportion of workers who have income support (from stratum 1)
P13= of workers who have in come support
Total
=2 =.2
10
q13 = the proportion of workers who have no income support( from stratum 1)
q13 = of workers who have no income support
Total

8 = 0.8
10

Similarly P 21= 0.6 q21 = 0.4

P22= 0.7 q22= 0.3, P23 = 0.1
P31 = 0.9 q31= 0.1 q23 = 0.9
P32= 0.7 q32 = 0.3
P33=0.3 q33=0.7

And at level of significance

Then nhi = sample size for variable I from stratum h.

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= (1.96)2 (0.8)(0.2)
(0.2)2

= (3.846) (0.25)
(0.2)2
= 0.9604
0.04

n13 = (1.96)2 (0.2) (0.8) 15

(0.2)2

Max (n11, n12 n13) Max (15, 24, 15) = 24

no = 24 and no = 24
N1 37

So the optimum sample size will be

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So select 16 from stratum1 i.e. n1 =16

Similarly n21 =

= (1.96)2 (0.6) (0.4)

(0.2)2

n22 =

20

n23 =

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no =23 and

n0 >5 % i.e .225 > .o5 so the optimum sample will be

Nh

So select 19 from stratum 2 i.e. n2 = 19 finally by following the same procedure as above
that is

n31 =

n32 =

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20

n33 =

20
[[[

no =23 and

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So optimum sample size from stratum 3 will be 12

Then totally have a sample of (n1+n2+n3) from all stratums that is
n = n1+n2+n3
= 16 + 19+ 12
= 47
So the total sample size is 47.
[

3.6 Sample selection method

In a sample survey when sample units are selected there could be a bias in the selection
procedure which may come from the use of non-random method. That selection is
consciously or unconsciously influenced by human judgment. Such bias can be avoided
by using a random selection method. To ensure true randomness the method of selection
must independent of human influence. There are different methods to select a random
sample. The important part of selection method is that the selection of each unit is based
purely on chance. This eliminates selection bias which may protect the sample from
being representative of the population. So as to gain a good and sufficient representative
of the population, this survey uses random number selection. That is, the member of the
population in each stratum is numbered from one to Nh and nh numbered are selected
from one of the random tables in any convenient and systematic way. A table of random
numbers consisted of digits from zero to nine which are equally represented with no
pattern or order.

The general procedure of selection is outlined as follows

nh is the sample size of strata h. Nh is the total population in strata h. That is N=

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1. Identify the strata population units, N h and give a serial number from one to total
number Nh determines how many of the random digits need when selecting each
element.
2. Decide the sample size nh to be selected. This was discussed on sample size
determination
3. Since the selecting point is the random number, can start from any one of columns
or rows, which can be determined randomly
4. Since each digit has an equal chance of being selected at any draw, you may read
down or horizontal of the columns and rows respectively in the table
5. Depending on the size of Nh, you can use number in pairs three at a time, and so
on.
6. If selected numbers are less or equal to the strata population size N h. Then ignore
all numbers greater than Nh for sampling with out replacement, reject numbers
that come up a second time. In the case use with out replacement
7. The selection process continues until n.

3.7 Statistical Method

To see the workers income, expenditure and saving on this research different statistical
analysis have been used. Some of the methods of analysis are descriptive statistics
(frequency table), Analysis of variance and chi-square.

3.7.1 Analysis of variance (ANOVA)

Analysis of variance uses to test for the significance difference between more than two
sample means from the population mean and to make inference about whether the
samples are drawn from the population.
The analysis of variance procedure is used in such problems where want to test for the
significance of the difference among more than two sample means.
In the analysis stage ANOVA have been used to show the factors of expenditure and
regression analysis between expenditure variables by taking income variables as a proxy
of variable factor in the error term for the models of economic variables included in this
case study.

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The analysis part will show the co linearity between the units of income, expenditure and
saving.
Demographic variable such as sex, age religion and education status are also included for
one way ANOVA, SPSS is important statistical software for analysis purpose.

Assumption of Analysis of variance

The analysis of variance technique is based on the following assumptions.
1. Each sample is drawn randomly from the normal population and the sample value
can reflect the characteristics of the population.
2. The populations from which the samples are drawn have identical mean and
variance.
µ1 = µ2 = µ3 = µ4 - - - = µn
1 = 2 = 3 = 4 - - - = n
3. The sample errors are assumed to be normally and independently distributed with
mean ( ) zero and variance 2
4. Each observation is mutually and independently distributed with mean +Ti and
variance 2
i.e Xij= ( + Ti, 2) where Xij- is the jth observation and for the ith treatment
Ti- is the treatment effect (deviation from over all mean) when
ith treatment is applied
- is a parameter common to all treatment called over all mean is the variance
Generally one way ANOVA Model
yij = +xij+eij
Where eij- is the error term
The error term eij are pair wise and correlated and each error term has constant
variance.

Hypothesis of analysis of variance

Null hypothesis (H0): All economic variables have not significant variation i.e. 1 = 2

Alternative hypothesis (H1): All economic variables have not equal mean i.e. 1 # 2

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3.7.2 Test of Independent (chi-square)

The test that mainly used to test the independence or inter correlated of two variables
is called chi-square analysis here chi-square test used for the test of independent
(whether the sex difference of the workers has an association on expenditure)
Assumption
1. The sample must be randomly selected from the population
2. The population must be normally distributed for the variable understudy
3. The observation must be independent of each other
Hypothesis, Testing
Ho: The two attributes (characters) of elements are not related.
H1: the two attributes (characters) are related
level of significant

where

Oij- observed frequency

Eij – expected frequency
The critical value
degree of freedom
r= number of row
C= number of column
Decision Rule: Reject h0 if X
Or significance value of SPSS is less than 0.05
Here have been used p values to the decision.

CHAPTER FOUR
4. ANALYSIS AND INTERPRETATION ABOUT THE COLLECTED DATA
4.1 Frequency Table

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monthly salary or salary wage

Cumulative
Frequency Percent Valid Percent Percent

Valid less than 300 11 23.4 23.4 23.4

300-500 16 34.0 34.0 57.4

501-1000 10 21.3 21.3 78.7

above 1000 10 21.3 21.3 100.0

Total 47 100.0 100.0

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PercentValid PercentCumulative Percent

ValidFre female
quency 18 38.3 38.3 38.3

male 29 61.7 61.7 100.0

Total 47 100.0 100.0

sex

age

Cumulative
Frequency Percent Valid Percent Percent

Valid under 20 3 6.4 6.4 6.4

20-30 24 51.1 51.1 57.4

31-40 14 29.8 29.8 87.2

above 40 6 12.8 12.8 100.0

Total 47 100.0 100.0

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education status

Cumulative
Frequency Percent Valid Percent Percent

Valid under 10th

14 29.8 29.8 29.8
grade

11-12 th
grade
11 23.4 23.4 53.2

diploma 7 14.9 14.9 68.1

degree 5 10.6 10.6 78.7

above 5 10.6 10.6 89.4

illiterate 5 10.6 10.6 100.0

Total 47 100.0 100.0

To observe from the table that most of the salary Wage is ranged from 300-500 Birr i.e.
34.0%. And can observe that the most workers are grouped to age 20-30 i.e. 51.1% of
workers. And it is visible that about 18 female and 29 male were respondents and the
education status of the most respondents were less than 10 that is 29.8% of the
respondents. As can see from the output no missing value is observed this is because the
workers adopt the behavior of frankness that is they tell us all information that need from
them and interview them properly

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4.2 Analysis of variance

ANOVA FACTOR AGE

ANOVA

Sum of Squares df Mean Square F Sig.

expenditure for house rent Between Groups 1.996 3 .665 1.201 .321

Within Groups 23.833 43 .554

Total 25.830 46

expenditure for water rates Between Groups 8.724 3 2.908 3.362 .027

Within Groups 37.190 43 .865

Total 45.915 46

expenditure for electric Between Groups 19.942 3 6.647 11.302 .000

Within Groups 25.292 43 .588

Total 45.234 46

expenditure for gas Between Groups 6.071 3 2.024 2.565 .067

Within Groups 33.929 43 .789

Total 40.000 46

your average expenditure per Between Groups 17.139 3 5.713 6.127 .000
day Within Groups 40.095 43 .932

Total 57.234 46

Expenditure for recreational Between Groups 20.720 3 6.907 18.757 .000

purpose Within Groups 15.833 43 .368

Total 36.553 46

monthly saving Between Groups 13.504 3 4.501 4.417 .009

Within Groups 43.815 43 1.019

Total 57.319 46

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One of the specific objectives of this case study is to test the hypothesis of whether the
demographic variable difference affects the economic variables. The null hypothesis is
stated verbally below
Ho: xi=0(Age of difference has no effect on the selected variable)
H1: xi= 0 (Age difference has an effect)
)

Average expenditure per day, expenditure for recreational purpose and monthly saving
perfectly affected by age differences. While expenditure for water rates are relatively
affected by age difference and the expenditure for water house rent and expenditure for
gas are relatively dormant (has no effect) on the age differences. Their P-value .32,
0.027,.000,.067,.000,.000 ,.009 for expenditure for house rent, expenditure for water
rates, expenditure for electric, expenditure for gas average expenditure per day,
expenditure for recreational purpose and monthly saving respectively.

ANOVA FACTOR SEX

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ANOVA

Sum of Squares df Mean Square F Sig.

expenditure for house rent Between Groups .502 1 .502 .892 .350

Within Groups 25.328 45 .563

Total 25.830 46

expenditure for water rates Between Groups .449 1 .449 .445 .508

Within Groups 45.466 45 1.010

Total 45.915 46

expenditure for electric Between Groups 1.663 1 1.663 1.718 .197

Within Groups 43.571 45 .968

Total 45.234 46

expenditure for gas Between Groups .090 1 .090 .102 .751

Within Groups 39.910 45 .887

Total 40.000 46

your average expenditure per Between Groups .261 1 .261 .206 .652
day Within Groups 56.973 45 1.266

Total 57.234 46

expenditure for recreational Between Groups .743 1 .743 .933 .339

purpose Within Groups 35.810 45 .796

Total 36.553 46

monthly saving Between Groups .147 1 .147 .115 .736

Within Groups 57.172 45 1.270

Total 57.319 46

The other demographic variable included in this study is sex. The hypothesis test for
factor sex and the seven economic variables can be stated as.
Ho: Xi=0 (sex difference has no effect on the economic variable)

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H1: Xi= 0 (sex difference has effect on the economic variable)

We have P-value.350,.508,.197,.751,.339,.652,.736 for expenditure for house rent,
expenditure for water rates, expenditure for electric, expenditure for gas, expenditure for
recreational purpose , average expenditure per day and monthly saving . From this figure
conclude that expenditure for gas, average expenditure per day and monthly saving are
highly dormant to sex difference with relatively to the others economic variable and
expenditure for house rent and expenditure for recreational purpose are not affected
almost in equal proportion by sex difference.

ANOVA FACTOR RELIGION

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ANOVA

Sum of Squares df Mean Square F Sig.

expenditure for house rent Between Groups .952 3 .317 .548 .652

Within Groups 24.878 43 .579

Total 25.830 46

expenditure for water rates Between Groups 2.499 3 .833 .825 .487

Within Groups 43.416 43 1.010

Total 45.915 46

expenditure for electric Between Groups 3.726 3 1.242 1.287 .291

Within Groups 41.508 43 .965

Total 45.234 46

expenditure for gas Between Groups .161 3 .054 .058 .981

Within Groups 39.839 43 .926

Total 40.000 46

your average expenditure per Between Groups 2.668 3 .889 .701 .557
day Within Groups 54.566 43 1.269

Total 57.234 46

expenditure for recreational Between Groups .362 3 .121 .143 .933

purpose Within Groups 36.192 43 .842

Total 36.553 46

monthly saving Between Groups 1.373 3 .458 .352 .788

Within Groups 55.946 43 1.301

Total 57.319 46

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The third demographic variable included in this study is religion. The hypothesis test for
factor religion and the seven economic variables can be tested as:
H0:xi =0(religion difference has no effect on economic variable)
H1:xi=0(Religion difference has an effect on economic variable )
we have P-value .652,.487,.291,.981,.557,.933 for expenditure for house rent,
expenditure for water rates, expenditure for electric, expenditure for gas, average
expenditure per day, expenditure for recreational purpose. Based on p-value expenditure
for gas and expenditure for recreational purpose are strongly affected by religion
difference while expenditure for water rates, expenditure for house rent, expenditure for
electric and average expenditure per day are relatively affected by religion differences.

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ANOVA FACTOR EDUCATIONAL STATUS

ANOVA

Sum of Squares df Mean Square F Sig.

expenditure for house rent Between Groups 4.760 5 .952 1.852 .124

Within Groups 21.070 41 .514

Total 25.830 46

additional income Between Groups 7.982 5 1.596 .845 .526

Within Groups 77.422 41 1.888

Total 85.404 46

income support Between Groups 2.789 5 .558 2.750 .031

Within Groups 8.317 41 .203

Total 11.106 46

monthly salary or salary wage Between Groups 25.731 5 5.146 7.648 .000

Within Groups 27.588 41 .673

Total 53.319 46

expenditure for recreational Between Groups 8.793 5 1.759 2.598 .039

purpose Within Groups 27.760 41 .677

Total 36.553 46

your average expenditure per Between Groups 29.417 5 5.883 8.672 .000
day
Within Groups 27.817 41 .678

Total 57.234 46

The fourth demographic variable included in this study is educational status the
hypothesis test for factor educational status and the six economic variables can be tested
as:
H0: xi =0(educational status difference has no effect on economic variable)
H1: xi=0(educational status difference has an effect on economic variable).

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The P-value .124,.526,.031,.000,.039,.000, for expenditure for house rent, additional

income, income support, monthly salary or salary wage, expenditure for recreational
purpose, and average expenditure per day . Based on p-value additional income is not
affected by educational status while average expenditure per day and monthly salary or
salary wage are perfectly affected by difference in education status. And income support
and expenditure for house rent is relatively affected by educational status differences.

4.3 Cross tabs

sex * expenditure for house rent Crosstabulation

expenditure for house rent

less than 100 birr 100-300 birr above 300 birr Total

sex female Count 7 7 4 18

male Count 15 10 4 29

Total Count 22 17 8 47

sex * expenditure for recrtional purpose Crosstabulation

Count

expenditure for recrtional purpose

less 100 birr 100-200 birr 201-300 birr above 300 birr Total

sex female 12 3 3 0 18

male 15 8 4 2 29

Total 27 11 7 2 47

To understand from the cross tabulation table male are more sensitive to pay more birr in
both cases(for house rent and recreational purpose).

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religion * expenditure for recrtional purpose Crosstabulation

Count

expenditure for recrtional purpose

less 100 birr 100-200 birr 201-300 birr above 300 birr Total

religion orthodox 11 5 2 2 20

protestant 5 2 2 0 9

Muslim 7 2 2 0 11

others 4 2 1 0 7

Total 27 11 7 2 47

Here orthodox expends least of less than 100 birr and maximum of above 300 birr. While
both Muslim and protestant expends least less than 100 birr and maximum of 201-300.

education status * monthly saving Crosstabulation

Count

monthly saving

<100 100-200 201-300 >300 Total

education status under 10 6 3 3 2 14

11-12 2 2 3 4 11

Diploma 1 2 2 2 7

Degree 0 0 3 2 5

Above 0 0 2 3 5

Illiterate 1 4 0 0 5

Total 10 12 12 13 47

As to read from the cross tabulation of education status and monthly saving those who
have degree and above can save monthly more than 200 birr.

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4.4 Test of Independent (chi-square)

Chi-Square Tests

Asymp. Sig.
Value df (2-sided)

Pearson Chi-Square .914a 2 .633

Likelihood Ratio .911 2 .634
Linear-by-Linear
.894 1 .344
Association
N of Valid Cases 47

The hypothesis test to be tested is:

H0: There is no association between sex and expenditure for house rent.
H1: There is association between sex and expenditure for house rent.

Discussion: The two-sided asymptotic significance of the chi-square statistic is greater

than 0.05, which implies that there is no any association between sex and expenditure for
house rent..

Chi-Square Tests

Asymp. Sig.
Value df (2-sided)

Pearson Chi-Square 2.300a 3 .512

Likelihood Ratio 3.010 3 .390
Linear-by-Linear
.935 1 .334
Association
N of Valid Cases 47

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The hypothesis test to be tested is:

H0: There is no association between sex and expenditure for recreational purpose
H1: There is association between sex and expenditure for recreational purpose.
Discussion:
The two-sided asymptotic significance of the chi-square statistic is greater than 0.05,
which implies that there is no any association between sex and expenditure for
recreational purpose..

Chi-Square Tests

Asymp. Sig.
Value df (2-sided)

Pearson Chi-Square 3.763a 9 .926

Likelihood Ratio 4.478 9 .877
Linear-by-Linear
.398 1 .528
Association
N of Valid Cases 47

The hypothesis test to be tested

H0: There is no association between religion and expenditure for recreational purpose
H1: There is association between religion and expenditure for recreational purpose.
Discussion:
The two-sided asymptotic significance of the chi-square statistic is greater than 0.05,
which implies that there is no any association between religion and expenditure for
recreational purpose.

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CHAPTER FIVE
5. Conclusions and Recommendations
5.1. Conclusions:

The previous analysis and interpretation show workers expend their money for different
types of commodities, but their consumption items and money expenditure is different
because of the difference in age and sex religion and education status. Based on the
analysis and descriptive statistics most of the workers aged under 30, like to expend their
money on recreation and total expenditure consumptions like educational purpose, almost
all age group are most sensitive to save money and to have a durable commodities and
when they get additional income they did not go run to consume it. The living status of
workers seams order to their working department i.e. daily about (labor field) workers
and management staff because of income level for the fact the more highly paid lives the
high standard life. The aged persons have highly additional income this is because they
have a high probability of having families and fixed assets and they have opportunity of
additional income from their family and fixed assets. From the three working
departments females expend their income for house rent unlikely the males they are not
sensitive to save money and to pay for educational purpose because of social values and
personal status. The workers expenditure is not clear as they want to tell their high
income.

5.2. Recommendations
Standing from the study to acquire some recommendation concerning on the result, of
course it is difficult to have a registered value for expenditure variables and amount of
income except to monthly salary but workers should expend their money according to
their level of income and should give more attention to durable goods. Next to that males
should have to adopt the behavior of saving and they should decrease their recreational
expenditure and finally recommend for the workers of Arba Minch textile factory is their
desire should be keep constant if possible decrease as their salary wage is increase the
data in normal and meet the assumptions. And the workers who are illiterate should be
learned from their colleagues in order to have a big knowledge on saving and how to
expend their salary.

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References
1. Barn son, William H. (1998) “Macro economics” Theory and Policy”
2nd edition
2. Pilbeam. International finance
3. Cochran.W.G. Sampling Technique. 3rd edition. 1909.

4. C.B.Gupta and Vijay Gupta, Introduction to statistical methods, 23 rd

edition.

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APPENDIX
UNIVERSITY OF ARBA MINCH
COLLEGE OF NATURAL SCEINCE
DEPARTMENT OF STATISTICS
Dear respondents, the objective of this research is to know how level of income of the
worker influence the level of money they expend on different goods and to show the
variation income from different working groups on Arba Minch Textile factory.
Instruction: - please read the question carefully and write the symbol (√) on the given
box for your response.
1. Sex A. Male B . Female

2. Age A. <20 □ B. 20-30 □ C. 31-40 □ D. >40 □

3. Education status A. < 10 th Grade □ B. 11th -12th Grade □

C. Diploma □ D. Degree □ E. above□ F. Illiterate□

4. Religion

A. Orthodox □ C. Muslim □

B. Protestant □ D. Others. □
5. Your employment condition

A. Permanent □ B. Temporary □ C. Others □

6. Working department

A. department of administration Office □

B. department of production and technique office □

C. department of trade and finance office □

7. Monthly salary or salary wage

A. <300 birr □ C. 501-500 birr □

B. 300-500 birr □ D. >1000 birr □

8. Additional income

A. <200 birr □ C. 401-600 birr □

B. 200-400 birr □ D. >600 birr □

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9. Income support A. Yes □ B. No □

10. Expenditure for house rent

A. <100 birr □ B. 100<300 birr □ C. above 300 birr □

11. Expenditure for water rates

A. Below 10 birr □ C. 21-40 birr □

B. 10-20 birr □ D. Above 40 birr □

12. Expenditure for electric

A. <15 birr □ C. 41-60 birr □

B. 15-30 birr □ D. >60 birr □
13. Expenditure for gas

A. <20birr □ C. 41-60 birr □

B. 20-40 birr □ D. >60 birr □

14. Expenditure for recreational purpose

A. <100 birr □ C. 2001-300 birr □

B. 100-200 birr □ D. >300 birr □

15. Average expenditure per day

A.<100 birr □ C.201-300 birr □

B.100-200 birr □ D.above300 birr □
16. Total expenditure

A. <100 birr □ C. 201-300 birr □

B. 301-400 □ D.>400 birr □

Thank you for cooperation !!!

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