The Conceptual Framework

Lecture 8

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Organization of this lecture

Conceptual Framework:• Role of the Conceptual Framework• Theory: Source of Conceptual

Framework• Hypotheses and Hypothesis Testing• Operational Suggestions

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“Economics is the science of thinking in terms of models joined to the art of choosing models which are relevant to the contemporary world. Good economists are scarce, because the gift of using ‘vigilant observation’ to choose good models … appears to be a very rare one.” John Maynard Keynes

• Although a conceptual framework may not always be required in a research proposal, no economic research should start without developing one.

• There is more misunderstanding and confusion about the conceptual framework than any other part of a research proposal (or project).–What is it?–What is the purpose?– How is it approached?

• It is an integral part of understanding and analyzing the research problem

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• A clear statement of the research problem often does not occur until the conceptual framework is developed.

• It should be considered “complementary” to the problem description, statement of objectives, and literature review, rather than a “fourth step”.

• The reasoning in the conceptual framework runs through the whole proposal.

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• The conceptual framework is often neglected, or done hastily and inadequately

• Reasons for this might be that it requires complex reasoning and abilities– Abstract reasoning– Recognition and synthesis of central points– Knowledge of existing relevant theory– Understanding the details of a problem and the

surrounding issues

• It is hard work and often frustrating

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• Another reason the conceptual framework is overlooked is that researchers often want to get on with “real research” instead of “theorizing” (especially in subject-matter and problem-solving research)

• However, failure to conceptualize while planning, may actually slow down the research, or can lead to fatal errors in design, procedures or interpretation.

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Role of the Conceptual Framework

• Concepts are generalizations. In economics, a concept is “a logical, mental construction of one or more relationships”.

• Concepts are inherently abstract and are based on logic and reasoning. In economics, concepts typically focus on relationships between variables.

• The primary purpose of the conceptual framework is to lead to hypotheses that are subject to testing

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• The conceptual framework may be viewed as an analysis of the research problem using theory.

• Economic theory will be used, and possibly theories from other disciplines as well.

• The theories are identified and then used in a conceptual analysis of the specific research problem

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Source Material for the Conceptual Framework: Theories

• Which theory is relevant? The relevant theory will provide insights into one or more of the following issues:– Sources of the research problem– Possible solutions to the problem– Relevant variables– Relationships involved in analyzing the problem– Hypotheses to be tested

(Williams, 1984)

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• For example – if one is interested in the problem of water use efficiency of the Nile river in Egypt:– The general theory of the efficiency in use of a

limited, but replenishable resource would be used– The theory would be adapted to the particular

natural resource (water) and place (Egypt), in its various uses (agricultural, domestic, industrial)

• In this example, it is also likely that Egyptian policy would need to be considered

eg. Egypt has a policy of free water for agriculture, which affects water use efficiency

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• Sometimes, there is no existing theory sufficient to analyze the research problem.

• In this case, one can either develop or refine a theory, or simply identify the gap and present an incomplete conceptual framework– This latter option of proceeding without an

adequate theoretical basis, might be defensible in an MS thesis, but probably not in a PhD dissertation or in professional research

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Hypotheses and Hypothesis Testing

• A primary function of the conceptual framework is to lead to hypotheses relevant to the research problem. Hypotheses result from the reasoning done in the conceptual framework.

• Hypotheses need to be testable and refutable.• Hypotheses are tentative assertions that are

subject to testing.

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• Hypotheses can take the form of a simple proposition of an expected outcome, or can assert the existence of a relationship. eg.– A simple proposition might be that one production

system, based on a particular technology is more profitable than another production system based on another technology

– A hypothesis of a relationship could be that in demand for wine in the US, the per capita consumption of wine is affected by price of wine, the price of other beverages, per capita income, religious affiliation, and ethnic background

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• Quantitative hypotheses are subject to empirical testing, the most common form being a statistical test. Four characteristics facilitate this:1) They must be stated in specific terms2) Appropriate data must be available3) Analytical techniques must be available4) There must be a conceptual basis (without which

quantification only shows association, not causation).

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• Qualitative hypotheses can be of three types (as introduced in Lecture 3)1. Maintained hypotheses (assumed) often take the

form of assumptions we make on conditions in which the problem exists. eg. The commodity production segment in agricultural may be assumed to be competitive

2. Diagnostic hypotheses deal with the causes of a problem. eg. A country’s chronic trade deficit may be hypotheses as due in part to foreign investment policy and commodity price ceilings.

3. Remedial hypotheses, which deal with solutions to problems, are optional since they are so closely related to diagnostic hypotheses

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• Three difficulties people often have in developing hypotheses are:1. Absence of a clear theoretical framework or

absence of theory2. Inability to use the framework logically to see

the hypotheses within3. Failure to understand research techniques that

allow the hypotheses to be tested

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Operational Suggestions

• Keep a clear focus on the primary purpose of the conceptual framework – to analyze the research problem.

• A good way to start is to use simple conceptual models, and then build on them to the complexity and sophistication necessary.

• This can be a useful approach for all kinds of research, policy analysis, and problem solving.

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The following steps may be useful in developing the conceptual model:

1) Study the research literature related to your problem. How have others conceptualized problems similar to yours? Are their conceptual analyses adaptable to your framework?

2) Reduce the problem to the simplest set of conditions. Sometimes you can “assume away” parts of a complex problem to gain an initial understanding.

3) Identify applicable economic theory. Consider a wide range of economic theories in selecting the most appropriate.

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4) Start with a “base model” analysis. Based on your literature review and basic assumptions, start with a simple model (statistical, graphical, mathematical …)

5) Expand the base model to other relevant dimensions of the problem. Alter and relax assumptions, then reanalyze the problem. This will likely make the model more complex, but remember, the goal is not complexity, but rather, accurately addressing the problem.

6) Assemble relevant, testable hypotheses from the conceptual analysis.

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• Conceptual frameworks go by many names; “model”, “conceptual model”, “conceptual considerations”, “theoretical considerations”, etc.

• Sometimes it is simply integrated into the problem description, but in academic proposals, conceptual frameworks are usually presented in a separate section.

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