UNIT 3 RESEARCH METHODOLOGY
3.1 Overview of the Data
Information that is relevant to the research on "The potential impacts of climate change and non-climate change variables on the gross domestic product in the ASEAN region is quantitative research which using secondary analysis data in spatial form, time series and cross-section data that analyzing each region which statistic is used in the form of annual countries, established by research from 1995 until 2018. The model comprises almost 10 variables: while there are 3 dependent variables of model analysis which including ππππππ (Gross domestic product in the agriculture sector, US$), πππππππππ (Gross domestic product non-agriculture sector, US$), π‘πππ (Gross domestic product in Total, US$), the independent variables include precipitation, variance-precipitation, average temperature, variance- temperature, current account balance, labor-force, inflation (average consumer prices), total investment rate, and time trend.
Precipitation happens when water falls down to Earthβs surface. This water might be in a liquid or solid state. Rain made if liquid water droplets falls when temperatures in the air and at the surface are above freezing (32Β°F, 0Β°C). Rain can start as water droplets or ice crystals in a cloud but always falls as liquid water. The supply of water is directly affected by weather and climate. Next to the critical water input through precipitation at daily, monthly and seasonal scales, also the loss through evapotranspiration should be taken into consideration. Particularly high temperature, low humidity and high winds can efficiently remove water from the land surface. Equally, the demand for water is expected to evolve under climate change, particularly as they relate to often rapidly changing demographic and economic settings. These changes generally increase the operational challenges and risk for the water sector. The degree to which rainfall amounts vary across an area or through time is an important characteristic of the climate of an area. This subject
area in climatology is called "rainfall variability." There are two types (or components) of rainfall variability, areal and temporal.
Calculating average temperature gives us a more accurate picture of the temperature in a specific location than a single measurement ever could.
Temperature fluctuates throughout the day over the course of a week, month to month and year to year. Calculate the mean daily temperatures of an area, usually a town or city, for each day of year. Take the temperature readings on the hour for a 24 hours period. Add the hourly readings together, the divide that number by 24 to get the mean daily temperature. Record the first measurement at midnight and the last at 11 p.m. of the same day. Calculate the average of the 12 mean monthly temperatures. Add the mean monthly temperatures for the months of the calenda year, January to December, together, and then divide by 12. This will be the mean annual temperature. The meaning in meteorology, diurnal temperature variation is the variation between a high temperature and a low temperature that occurs during the same day. It is important to evaluate how the climate has varied and changed in the past. The monthly mean historical precipitation and temperature data can be mapped to show the baseline climate and seasonality by month, for specific years, and for precipitation and temperature.
The mathematical equation that allows us to determine the current account balance tells us whether the current account is in deficit or surplus (whether it has more credit or debit). This will help understand where any discrepancies may stem and how resources may be restructured to allow for a better functioning economy.
πΆπ΄π΅ = (π β π) + (ππ + π΄πΆπ)
Where:
X= Exports of goods and services M= Imports of goods and services NY= Net income abroad
NCT= Net current transfers
Theoretically, the current account balance (CAB) should be zero, but, in the real world, this is improbable. If the current account has surplus or deficit, it informs
on the government and state of the economy in question, both on its own and in comparison, to other world markets.
The labor force, or work force, is the total number of people who are currently employed plus the number of people who are unemployed and seeking employment. This number does not include people who are unemployed and not seeking employment, such as students and retirees. People who would like a job but are not current looking for one are also not considered part of the labor force. In short, the workforce includes those who either have a job or are actively seeking one (Lebovitz and Eddington, 2019). The labor pool does not include the jobless who are not looking for work. The size of the labor force depends not only on the number of adults but also how likely they feel they can get a job. Consequently, the labor pool shrinks during and after a recession. Thatβs true even though the number of people who would like a full-time job if they could get it may stay the same. The real unemployment rate measures all the jobless, even if they are no longer in the labor force.
Economics theory states that there are two sources of inflation, cost-push and demand-pull inflation (Lipsey and Chrystal, 2003). When in a country there is demand-pull inflation, due to increasing demand for food, producers are expected to invest more in the agricultural sector, resulting in increased production and as a consequence increasing demand pull inflation should lead to increasing percentage contribution of agriculture to GDP. Inflation is the decline of purchasing power of given currency over time. A quantitative estimate of the rate at which the decline in purchasing power occurs can be reflected in the increase of an average price level of basket of selected goods and services in an economy over some period of time. The rise in the general level of prices, often expressed as a percentage, means that a unit of currency effectively buys less than it did in prior periods. Inflation is the rate at which the value of a currency is falling and consequently the general level of prices for goods and services is rising. It can be viewed positively or negatively depending on the individual viewpoint and rate of change.
Investment refers to an increase in capital assets, and typically includes investment by business, investment in property and investment by governments in
βsocialβ capital. The level of investment in an economy tends to vary by a greater extent than other components of aggregate demand. This is because the underlying determinants also have a tendency to change. Investment is a sacrifice, which involves taking risks. This means that businesses, entrepreneurs, and capital owners will require a return on their investment in order to cover this risk, and earn a reward.
In terms of the whole economy, the amount of business profits is a good indication of the potential reward for investment. Investment is inversely related to interest rates, which are the cost of borrowing and the reward for lending. Investment is inversely related to interest rates for two main reasons. Firstly, if interest rates rise, the opportunity cost of investment rises. This means that a rise in interest rates increases the return on funds deposited in an interest-bearing account, or from making a loan, which reduces the attractiveness of investment relative to lending.
Hence, investment decisions may be postponed until interest rates return to lower levels. Secondly, if interest rates rise, firms may anticipate that consumers will reduce their spending, and the benefit of investing will be lost. Investing to expand requires that consumers at least maintain their current spending. Therefore, a predicted fall is likely to discourage firms from investing and force them to postpone their investment decisions.