IMPACT OF INCOME DISPARITIES ON THE LEVELS OF EDUCATION OF

CHILDREN IN NGOGWE SUBCOUNTY MUKONO DISTRICT

BY

NGABITSINDA ALBERT LE GRAND

BSQE

16/X/2251/PS

216002298

A RESEARCH PROPOSAL SUBMITTED TO THE SCHOOL OF STATISTICS AND

PLANNING IN PARTIAL FULFILLMENT FOR THE AWARD OF BACHELOR’S
DEGREE IN QUANTITATIVE ECONOMICS

March, 2019
Acronyms

GOU ……………………...………..Government of Uganda

UBOS………………………………Uganda Bureau of Statistics

MFPED…………………………….Ministry of Finance Planning and Economic Development

MGSLD…………………………….Ministry of Gender Labour and Social Development

CACS ………………………………Child Sacrifice Coalition

SDGS …………………..…………...Sustainable Development Goals

UNDP,………………………………United Nations Development Program

UNICEF ……………………………United Nations Children Fund

OECD ………………………………Organisation for Economic Co-operation and Development

PISA ………………………………...Programme for International Student Assessment

UNECA ……………………………..United Nations Economic Commission For Africa

TABLE OF CONTENTS
Acronyms ...................................................................................................................................................... 2
CHAPTER ONE: INTRODUCTION ........................................................................................................... 5
1.0 Introduction ................................................................................................................................... 5
1.1 Background ................................................................................................................................... 5
1.2 Statement of the problem .................................................................................................................... 7
1.3 Objectives of the research ................................................................................................................... 8
1.3.1 Main objective ............................................................................................................................. 8
1.3.2 Specific objectives ....................................................................................................................... 8
1.4 Scope of the study ......................................................................................................................... 8
1.5 Significance and scope of the study .................................................................................................... 9
1.7 Justification/Rationale.................................................................................................................. 9
1.8 Definition of key terms ................................................................................................................. 9
1.9 Hypotheses ........................................................................................................................................ 10
CHAPTER TWO: LITERATURE REVIEW ............................................................................................ 11
2.0 Introduction ................................................................................................................................. 11
2.1 Household income levels of citizens ................................................................................................. 11
2.2 Causes of income disparities ....................................................................................................... 13
2.3 Effects of income disparities on education of children ..................................................................... 15
CHAPTER THREE: METHODOLOGY ................................................................................................... 19
3.1 INTRODUCTION ............................................................................................................................ 19
3.2 Research Design................................................................................................................................ 19
3.3 Measures ........................................................................................................................................... 19
3.4 Study population ............................................................................................................................... 19
3.5 Sampling Design ............................................................................................................................... 19
3.5.1 Sample size determination ......................................................................................................... 20
3.5.2 Sampling technique ............................................................................................................. 21
3.6 Validity and reliability of instruments ....................................................................................... 21
3.7 Data collection method .............................................................................................................. 21
3.8 Data analysis techniques ............................................................................................................. 22
3.8.1 Univariate data analysis ..................................................................................................... 22
3.8.2 Bivariate analysis ............................................................................................................... 22
3.9 Ethical Consideration ........................................................................................................................ 23
References ................................................................................................................................................... 24
 CHAPTER ONE: INTRODUCTION

1.0 Introduction

Income inequality is of fundamental interest not only to economists, but also to other social
scientists to assess the impact of income disparity on the society (Bayat et al, 2014). Therefore
there is need to investigate the impact of income inequality on socio economic factors, in order
to reduce problems resulting in the continuous increase in income disparity.. Hence this chapter
introduces the background of the study with special emphasis on highlighting the dangers the
effects of economic disparities on education of children in Ngogwe sub county Mukono district.

1.1 Background
During the past several decades several governments have pursued redistributive policies aimed
at fostering “equality of economic opportunity “the idea that although people’s incomes may
vary, this variance should be due primarily to factors such as individual ability and effort, not to
differences in circumstance(Gallie , 2007) . There are many channels through which economic
inequality or disparity influences these factor (Gallie, 2007). Income disparity or inequality
therefore refers to the difference between the income of the richer and the poorer parts of the
society, Disparity usually refers to a difference that is unfair (Birdsall et al., 2005). In the past
years, there has been a growing concern about the rising of income disparities in the people of
the world, however the gap between the rich and the poor has continued to widen at an alarming
rate, the charity organization Oxfam reported yesterday in its study on inequality in the country
(World Bank, 2017).

Sweden was as of 2013, the most equal society in the world with a gini coefficient of 0.25 per
cent, followed by Norway (25.8 per cent).The Oxfam report shows that despite the decline in the
national poverty at the national level, regional distribution of poverty reduction was mixed.For
the case of East African countries if they are to be ranked by the use of Gini coefficient Rwanda
is the most unequal with the gini coefficient of 0.508 percent, followed by Kenya with a gini
coefficient of 0.477, according to 2013 figures Burundi is the most equal society in the East
African Community with a gini coefficient of 0.333 percent, followed by Tanzania 37.6 %(
UNESCO,2013).
Although poverty levels have been falling, Uganda is now ranked 17th among the countries with
the highest level of income inequality in Africa according to the report published by the united
nations economic commission for Africa (UNECA) titled ”Urbanization and industrialization
for Africa transformation”, according to this report the Uganda Gini coefficient for income
inequality is at 0.45,which makes Uganda worse than Tanzania (0.36) and Burundi (0.33) but
better than Rwanda (0.51) and Kenya(0.48)

This disparity affects education for children in a myriad of ways ranging from having less
disposable income can be used to cater for the scholastic materials of children to school fees of
these children()

According to the OXFAM International report of 29 march 2017, 10% of Uganda’s population
(estimated at 36 million people) own 35.7% of national income estimated at US$s27bn (about
Shs97trn). This means that 3.6million Ugandans own over Shs34trn of Uganda’s GDP.

The report adds that another 10% (3.6m Ugandans) of Uganda’s population composed of the
poorest only won 2.5% (about Shs2.4trn) of the country’s national income.

Although the number of Ugandans living below the poverty line has declined to 19.7% in 2014,
down from 56% in 1992, the report notes that income inequality has instead increased. In fact,
these poverty figures were based on one dollar being enough for a person a day. However,
economists and analysts say, one dollar is no longer enough to cater for one’s daily needs. They
argue that for a person to live well a day, he or she needs over three dollars.
The Oxfam report shows that Uganda is more unequal than it has ever been since the Financial
Year 1992/93. In that year, the gini coefficient was 0.365, but it stood at 0.47 by Financial Year
2014/15. Going by the latest figures, Uganda remains the third most unequal society in the East
African Community.
“The people of northern Uganda are eight times poorer than those in central Uganda and five
times poorer than those in western Uganda,” says the Oxfam report.The poverty level in the
north stood at 72.2 per cent in 1992/93, 60.9 per cent in 1997/98, 63.7 per cent in 1999/2000,
63.6 per cent in 2002/03, and in the year 2012/13 it stood at 47 per cent. In the same period, the
Eastern region registered a poverty level of 58.8 per cent, 54.3 per cent, 35.0 percent, 46.0
percent and 37 percent over the same periods.
The western region poverty level trends over the same period stood at 53.1 percent, 43.8 per
cent, 26.2 per cent, 31.4 per cent, and 10 per cent, while the numbers for Central Uganda were
recorded at 45.6 per cent 27.9 per cent, 19.7 per cent, 22.3 per cent, and 6 per cent.The report
further states that the Structural Adjustments (SAPs) and liberal economic policies did not create
the anticipated jobs for the country.From the gender perspective, the report shows that 50 per
cent of the women are engaged in three lowest paying sectors (agriculture, domestic care, mining
and quarrying
. Oxfam is an international confederation of 18 NGOs working with partners in over 90 countries
to end the injustices that cause poverty. The Oxfam report shows the richest 10 per cent of
Ugandans have had their income grow by an impressive 20 per cent per year. This has meant that
these 10 per cent richest Ugandans now own 35.7 per cent of the country’s wealth, leaving the
remaining 90 per cent of Ugandans to share the remaining 64.3 per cent of national income. But
this still does not complete the picture for the poorest Ugandans. The report further shows that
the poorest Ugandans have seen their possessions decline by 21 per cent over the past 20 years.
As a result, the poorest 10 per cent of Ugandans own only 2.5 per cent of the country’s wealth,
while the poorest 20 per cent of Ugandans own a meagre 5.8 per cent of national income. This
tragic economic state of Uganda’s poorest echoes the Biblical truism in Matthew 13:12, which
says: “Whoever has will be given more, and they will have an abundance. Whoever does not
have, even what they have will be taken from them.” The report, which was released at the
Serena Kampala Hotel, is titled: “Who is growing? Ending inequality in Uganda”. The report
further shows that Uganda’s Gini Coefficient stood at 0.365 in 1992/93, in the year 1997/98, it
increased to 0.347, and in 1999/2000, it rose to 0.395, in the year 2002/03, it shot up to 0.428,
and in 2005/06 it stood at 0.408, while in 2009/100 it was 0.426 and in 2014/15 it was at 0.47.
Gini coefficient is a measure of income inequality in a society. It is measured from zero (0) to
one (1), with zero (0) corresponding to perfect income equality (everyone has the same income)
and one (1) corresponds to perfect income inequality (one person has all the income, while
everyone else has zero income). In economic terms, a lower Gini coefficient tends to indicate a
higher level of social and economic equality. For Uganda’s case, this clearly shows that income
inequality is trending upwards. A rising gini coefficient implies that though Uganda’s economy
has been growing at a higher rate, the gap between the rich and the poor has been widening over
the years. Oxfam cites specific drivers of inequality in Uganda as meagre investments in health,
education, and agriculture and blotted administrative costs of 15 per cent of total budget amid
lack of critical services. The report points out a grim statistic, showing that one doctor in Uganda
serves 24,725 people. The World Health Organisation recommended doctor-to-patient ratio is
one doctor for every 1,000 people.

1.2 Statement of the problem

This means that poverty levels could actually be higher in Uganda than reported considering the
fact that the cost of living has gone up over time.
Despite Uganda’s economy growing at an average of 6% since 2002, the report reveals that the
percentage share of the national income between the richest and the poorest has been increasing
and decreasing respectively.
Why Rich Get Richer

In Mukono an estimated 500 children are engaged in child labour and the underlying cause to

child labour according to Mr Okuta is economic disparities in families and ignorance in families.

According to the report, child labour is among the major causes of child abuse and exploitation
and fundamental violation of children rights.Sensitizations and education awareness has been
carried out and still ongoing though some parents were still reluctant to provide support and
protection for the children away from fishing into formal education.”Poverty, teenage pregnancy
and lack of mentorship programmes have been singled out as the leading causes of the high rate
of girls dropping out of school.

1.3 Objectives of the research

1.3.1 Main objective

This report provides a first step into understanding more clearly how rising income inequalities
might affect Uganda society and establish widely accepted knowledge that inequality is a toxic
element in Uganda society and suggest measures to policy makers to tack le them.

1.3.2 Specific objectives

To examine the income levels of households in Ngogwe sub county Mukono district

To assess the causes of income disparities in Ngogwe sub county Mukono district

To assess the effects of income disparities on education attinemnt of children in Ngogwe sub
county Mukono district

1.4 Scope of the study

Ngogwe is approximately 18.5 kilometres (11.5 mi) south of Buikwe, the site of the district
headquarters.[1] This is about 55 kilometres (34 mi) southeast of Kampala, the capital and
largest city of Uganda.[2] The coor
1.5 Significance and scope of the study

Fundamentally, the relevance of this study is based on the fact that it aims to observe the impact
of income inequality on the people of Uganda . By carrying out various econometric analysis,
we shall be able to establish the extent to which the factors are inter-related.

From a theoretical perspective, this study will contribute to the plethora of knowledge and
already existing literature in the area of economic growth and income inequality. It would be an
important addition to the pool of scholarly and academic articles in this field.

Another significance of this study is that it offers probable recommendations and policy
measures to government, policy makers and NGO’s based on the findings of the research that
would be essential in ensuring the reduction of income inequality in Uganda and Africa at large.
Finally, the study will also fill in the gaps in the existing literature in the field.

1.7 Justification/Rationale
Inequality is bad for everyone whether rich or poor ,it continue to be a barrier for economic
development in developing countries .therefore there is need for quick and well investigated
action in order to stop the widening of income inequality.

1.8 Definition of key terms

Gini coefficient: Sometimes called Gini index, or Gini ratio, is a measure of statistical dispersion
intended to represent the income or wealth distribution of a nation's residents, and is the most
commonly used measurement of inequality.

Disparity: Disparity is the condition of being unequal, and a disparity is a noticeable difference.

The poor: If there are large numbers of poor people, economic growth may be affected by their
inability to invest in education and their lower health levels, among other factors.

The middle classes: If inequality “squeezes” the middle class, it may reduce its demand for
goods and services.
The rich: If inequality means rising incomes among the rich, it could see them accumulate
savings, which banks can then lend out, so increasing investment in the economy. Or, the rich
may use their economic power to lobby against policies that don’t serve their needs, for example
investment in public health and education

1.9 Hypotheses

Hypothesis one: Educational inequality is positively affected by income inequality

Hypothesis two: Educational inequality is positively affected by educational attainment

Hypothesis three: Household income has positive influence on the performance

 CHAPTER TWO: LITERATURE REVIEW

2.0 Introduction

This chapter highlights the key concepts and notions which underlie the subject matter of the
study in order to provide an ideal framework for understanding the relationship between income
inequality and other socio economic variables in Uganda. Specifically, it will help answer the
proposed research questions and address previous empirical studies carried out by other
researchers in this field and identify gaps in the existing literature.

2.1 Household income levels of citizens

Despite Uganda making significant development progress over the last two decades, the last
Uganda National Household Survey, published late in 2016, the national poverty rate had
declined to 31% for 2015/16, from 56% in 1992/93 and 38% in 2002/03 (UBOS, 2006). Prudent
macroeconomic policies have generated robust growth, at an average rate of 5.6% over the five
years to 2004/05 and forecasted at 6.4% for 2006/07-2008/09. HIV/AIDS adult prevalence has
declined significantly from around 18% in the early 1990s to 6.4% in 2005 and primary level net
enrolment rates have increased from 62.3% in 1992 to 92% for girls and 94% for boys in 2006
(World Bank, 2007).
Uganda remains one of the poorest countries in the world, however, ranked 145 out of 177
countries by the Human Development Index (UNDP, 2006). In 2006, per capita income was
approximately US$300, life expectancy was approximately 49 years and population growth
amongst the highest in the world at 3.3% (World Bank, 2007).
In more detail, the literature review has highlighted the following elements:
The poverty decline in Uganda has not been experienced uniformly across the country. In the
Northern region of Uganda, for example, poverty decline has been modest at only approximately
17% since 1992/93. This is compared to substantial progress made in the West and Central
regions of Uganda, where poverty has declined by around 60% since 1992/3 (World Bank,
2007b: 3). Table 1 compares a range of welfare indicators across the four regions of Uganda,
highlighting that the Northern region has the highest poverty rate, highest annual average
population growth, highest fertility levels, highest proportion of people living in a hut and lowest
proportion of people owning a mobile phone.

Economic status of a family in both northern and central regions had a–ve Beta of 0.563,
implying a unit increase in educational inequality will decrease economic status by 56% thereby
reducing the quality of life. Accordingly, inequality in education achievement and earning
inequality are correlated, within the United States and across countries. Majority of key
informants in the study agreed that in both regions, there is a high level of educational inequality
in most schools in form of economic status. Students from poor families generally felt that they
were not treated the same way as those from rich and moderate families. One respondent from
Mukono said that:

Educational inequality in Gulu was found to be higher compared to Mukono, and this greatly
affects the quality of life of the student after school. At primary level, achievement rates and
completion rates are lower in the northern region of Uganda as compared to the central region
[17]. Key informants indicated that in northern Uganda, not many students take on science
subjects which may give them opportunities to compete favorably for highly skilled jobs such as
doctors, and engineers which are also related to attainment of a higher quality of life and
increased income. Majority of respondents (77%) indicated that the quality of education and the
level attained determine the social class of an individual and this can be explained by the fact
that some highly rated schools have strong associations that even extend beyond school life
thereby increasing social networks and thus improvement in social capital [8]. In Italy, similar
findings cite the importance of social-networks in providing a wide range of opportunities for
finding employment [9]. A key informant from Gulu reported:
2.2 Causes of income disparities
The performance of an economy is usually described in terms of mean variables, such as per
capita GDP or disposable income. If per capita GDP increases, namely, if “the economy grows,”
performance is considered to be positive. While important, this evaluation is incomplete, because
it does not consider the distribution of income. Actually, an increase in mean income can reflect
different combinations of poverty and distributional changes. However, the linkages among
growth, poverty, and income distribution are complex (Ferreira, 1998). Some authors (Ravallion,
2001; Besley and Burgess, 2003) illustrate the relationships between poverty, income growth,
and inequality by providing examples of how both growth and changes in inequality influence
Poverty Income inequality consistently increased as Singapore gained affluence, with the
exception of the short era of 1980s. Surely, this trend has been partly shaped by globalization.
What were the other forces that caused income disparity in Singapore to proliferate deeper and
faster than elsewhere? Was it Singapore’s unique pattern of growth or are there any government
policies to blame? A closer look into the economic progress and the underlying strategy uncovers
causes of deepening income rift in Singapore

Why the rich get richer

“Inequality cuts across generations. The children of wealthier people have access to greater
opportunities and will themselves be richer,” The Oxfam report also strongly points at
corruption as a big factor in Uganda’s rising income inequality. Therefore there is much need for
government to fight corruption in order to reduce income inequality and its associated hazards
Despite the government introducing UPE government has put in place universal primary
education where every child can at least study and complete primary school level. The household
income leads to most children being exploited in maize, sugarcane and tea plantations

In according to Adam Smith (1776) in his book the wealth of nations, “no society can surely be
flourishing and happy, of which the far greater part of the members are poor and miserable”.
Oxfam (2016) suggested that 62 of the richest people have the same wealth as the 3.6 billion
poorest people. The rich continue to accumulate wealth, while the poor struggle for basic
necessities like food, access to clean water and shelter.

A widespread concern for pro-poor growth has resulted in part from evidence showing that, in
some countries, the fruits of economic growth have not been equally shared by the population
and from evidence that during some growth events the wellbeing of the poor actually decreased
(Perry et al., 2006). The relationship is even more relevant if an economy experiences negative
growth, when poverty deepens further. In Latin America, growth and poverty patterns have
differed substantially across countries and within countries over time. There are cases of
sustained growth and poverty reduction, like Chile, along with unfavorable experiences in terms
of poverty, such as Argentina and Venezuela.
This mix of experiences makes the analysis of pro-poor growth particularly rich. Moreover, the
issue has been at the core of political debates. Recent episodes of economic growth combined
with unchanged or even increasing poverty have made some people question the proposition that
growth is strongly linked to poverty reduction. Others have been concerned about the ways in
which initial poverty influence growth and have explored the persistence of poverty traps
(Azariadis, 1996a, 1996b). This dissertation is concerned with how inequality may, in turn,
influence the process of growth itself.
A multiplicity of factors induce changes in incomes. These changes usually modify several
dimensions of the income distribution, like the mean income, its degree of dispersion, and the
mass below certain cut-off income level. In this sense, growth (linked to shifts in the mean of the
distribution), changes in inequality (linked to variations in the dispersion of income), and
changes in poverty (linked to movements toward the lower tail of the distribution) are all
particular manifestations of changes in the whole distribution.
Thus, in a given period, one should not think of changes in poverty as being caused by growth
and changes in inequality but, rather, all three are outcomes of changes in the distribution caused
by other determinants. Current inequality may have consequences, however, on future growth
and other outcomes. This dynamic relationship constitutes the concern of this dissertation.
Researchers have found it useful, nevertheless, to decompose changes in the distribution of
income in a given period into two dimensions: changes in its central position (growth) and
changes in its dispersion (inequality). Each of these dimensions implies, in turn, changes in the
concentration in the lower tail of the distribution (poverty). From this static perspective, changes
in poverty are presented as “the result” of growth and changes in inequality (Bourguignon,
2004).
This decomposition does not predict, however, how different degrees of inequality may influence
the rate of economic growth over time or the reverse question of how different patterns of growth
may result in diverse paths of inequality.
income growth over time; that is, it examines the dynamic relationship between previous levels
of inequality and current growth, in a regional context and taking into account the spillover
effects of inequality among neighboring districts in Uganda
The other factor fuelling inequality is widespread reports of displacement of poor households by
infrastructure projects. The report shows that whereas the level of poverty has been declining
over the years, income inequality has been worsening. Absolute poverty stood at 56 per cent in
1992, and reduced to 31 per cent in 1999 and by 2014, it was reported at 19.7 per cent of the total
population.

2.3 Effects of income disparities on education of children

The relationship between income inequality and educational attainment is highly significant
where the poor majority are likely not to attain the high institutional of learning than the rich
people. Despite the availability of free Universal Secondary Education (USE) in public schools
in Uganda, some children of school-going age are not accessing education at all, while some of
those who have accessed it have experienced educational inequalities due to a number of factors,
and the drop-out rate has been noted to be high in many schools around the country. South
African literature discusses a number of different determinants of dropout of school factors such
as family structure, financial constraints, and shocks including loss of employment. High levels
of inequality and dropout rates being registered in a number of schools around the country,
contradicts the UNESCO report, which suggests that there is hope that fewer young women in
Uganda will be left lacking skills for work in the future because of having attained primary
education . In Uganda, according to the education system, after primary education one is
supposed to continue to secondary education as no skills can be attained at this level, thus the
introduction of USE.

Accordingly, employers are likely to ,evaluate additional ‘signals’, such as field of study, type of
institution or program level in potential candidates for vacant positions . It is for this reason that
most families in Uganda, prefer to send their children to privately owned schools which are
highly rated in terms of educational standards while, for low income families their children
mainly go to government owned schools whose educational standards in most cases do not match
the privately owned schools. For the poor families who cannot afford to send their children to
school, the option is to stay at home and engage in different activities some of which generate
income to supplement on the family expenditure. This has accelerated educational inequalities
between the rich and the poor. Research in Uganda indicates that in poor families girls lag
behind boys by 20% in enrolment at secondary level and the gap widens further at tertiary and
university levels where cost and gender become important factors in determining access to
education . Girls have also remained strongly disadvantaged in education, in other parts of the
world such as sub- Sahara Africa, South Asia, the Middle East, and North Africa .In the United
States, information suggests there is a wide rift between top and bottom and inequality is
increasing as a consequence of a growing premium on college and postgraduate
education.Accordingly, enrolment, accomplishment, and achievement rates at primary level are
higher in the central region than in the northern region of Uganda. A broader approach, could
help in better understanding of the ways in which education systems relate to the production of
inequality in complex and contradictory ways. Educational research is needed to address these
needs to ask questions on the governance, coordination and management of the education sector
as well as its content, teaching and outcomes.

Most OECD societies offer substantial educational opportunities to all citizens regardless of
income. But in practice, while education systems can be a force for social mobility (see Section
4.4) they can also reproduce and reinforce a society’s existing pattern of wealth distribution. On
average in most countries, children from middleclass and wealthy families do better in school,
are more likely to go to university and, eventually, earn more as adults.
Social divisions in the classroom
Education systems, too, can reinforce social distinctions by offering a lower quality of education
or a narrower range of options to children from disadvantaged families. For example, schools
with large numbers of disadvantaged students tend to find it harder to attract qualified teachers,
even though – or, perhaps, because – the challenges of teaching children from disadvantaged
families may be greater.
And in many countries, children from differing social backgrounds are essentially taught
separately. That’s despite evidence from the OECD’s Programme for International Student
Assessment (PISA) that combining children from different social backgrounds, and of different
abilities, tends to raise overall performance without bringing down the performance of the
strongest students. This segregation can happen because most schools tend to serve a particular
area. But it can also happen if students are streamed into different classes by ability – weaker
students are more likely to come from disadvantaged backgrounds.
More from Insights: Find out why it’s “never too early to join the rat race” at the OECD Insights

Similarly, Kundu and Tutoo (2000) believed, that home background is the most significant
primary factor which influences and shapes children’s attitudes, personality and behaviour
patterns that lead to good performance at schools. A study conducted by Mugisha (1991) in some
selected schools in Kampala District on causes of pupils’ poor performance revealed that
attitudes of children and their home background positively or negatively influence their
performance in schools. He further pointed out that the home and the school should be accepted
as partners to improve pupils’ performance. Despite the above studies, none had been done in
Paidha Town Council primary schools to find out about pupils’ poor performance. It is the hope
of the researcher that pupils’ performance in Paidha should be very good 3

due to its conducive geographical background. Skinner (1945) advised that for proper learning to
take place, learning experiences should be guided and appropriately controlled. This means, the
environment or the circumstances under which learning occur should be supportive and
conducive enough for effective learning and achievement

Looking at the economic effects, different scholars address the importance of education when it
comes to accumulation of human capital. Human capital accumulation is one of the main pillars
that stimulate economic growth (Gyimah-Brempong, Paddison, & Mitiku, 2006). Economic
growth is an important factor for lifting underdeveloped regions out of poverty. The
accumulation of skills and knowledge is important for getting better employment and increase
household income.
education leads to higher earnings via employment and productivity increase. These increased
earnings will again positively influence the education level; this leads to an even larger effect on
the long run. Education is particularly important for the Sub-Sahara Africa region, because it is
widely accepted to be one of the leading instruments that promote economic growth. By means
of accumulating human capital through education, individuals have influence on reducing their
own poverty (Bloom et al., 2006). In addition, the importance of human capital over physical
capital cannot be underestimated “The main engine of growth is the accumulation of human
capital – of knowledge – and the main source of differences in living standards among nations is
differences in human capital. Physical capital plays an essential but decidedly subsidiary role”
(Gyimah-Brempong et al., 2006: P509). Based on this we can say that, investing in human
capital, by means of education, might have a higher economic return than investing in physical
capital. Education should therefore be a focus point for governments in order to reduce poverty.
Comparing the average years of schooling in the Sub-Saharan Africa region to the rest of the
world shows that they are lagging far behind. The average year of schooling is shown in Table 2.
A difference can be seen between 9.0 years of schooling in OECD countries against 7.3 years in
Sub-Saharan Africa. The average rate of return per additional year of education does also differ
between the different regions. Important to notice is that the rate of return in lower developed
regions is higher compared to the rate of return in more developed countries, 11.7 in Sub-
Saharan Africa against 7.5 in OECD countries. The worldwide average lies around 10 percent.
 CHAPTER THREE: METHODOLOGY

3.1 INTRODUCTION

This chapter presents the method and procedure that will be adopted in this study. The chapter is
organized under the following sub-headings; Research Design, Population of study, Sample and
Sampling technique, Research instrument, validity of the instrument, Reliability of the
instrument, Method of Data collection and Methods of Data analysis.

3.2 Research Design

The research design that will be adopted for this study will be cross-sectional because the study
intends to pick only some respondents as representative sample elements of the cross-section of
the population one at a time without revisiting the respondents. This study will be conducted
across participants over a short period of time and it will not necessitate the researcher to make
follow ups of the participants. This design is considered suitable because it will enable the
researcher to generate data through standardized collection procedures based on highly
structured research instruments.

3.3 Measures
The dependent variable is KAP of OTT and MM taxes among university students which is
basically the knowledge, attitude and practice of OTT and MM taxes among university students.
This study assesses the respondent’s knowledge of these taxes, the respondent’s attitude towards
these taxes and then the respondent’s practice of these taxes. The independent variables are
gender, course offered, program of study, year of study, religion, residence, former secondary
school and sponsorship.

3.4 Study population

The population in this research is the undergraduate students in Makerere University School of
statistics and planning. The total population comprises of 1542 undergraduate students.

3.5 Sampling Design

A sample design is a definite plan for obtaining a sample from a given population. Sample
design may as well lay down a number of items to be included in the sample. Sample design is
determined before data collection (Kothari,2009). There are many sample designs from which a
researcher can choose. However in this study the researcher will prepare a sample design that
will be reliable and appropriate for the research study and hence will use stratified sampling
technique where the researcher will determine the probability of an element being included in the
sample. Stratified sampling will be applied since the students to be drawn will not constitute a
homogeneous group, this will help obtain a representative sample and give each and every
member of the population an equal chance of being selected for the sample.

3.5.1 Sample size determination

The required sample size will be determined using Cochran formula below

n =( Z2α/2×P×q) /e2…………………………………………………………3.1

Where;

n = required sample size

P×q = population variance

e = Permissible error

α = Level of significance

Where;

P= 0.5 and q= 1-0.5 = 0.5 then; e≤ 0.1 α= 0.5

n = (1.962× 0.5 ×0.5)/ 0.12

n = 96.04 ≈ 96 respondents

For the three years of study then;

n = 3×96

n = 288 respondents
3.5.2 Sampling technique

The study will utilize stratified random sampling therefore the target population will be divided
into strata. The strata are necessary because the target population is heterogeneous in nature.
Respondents will be randomly selected from the three strata (years of study) and each respondent
selected will be given a questionnaire to complete. The researcher chooses stratified sampling
technique for this study because it gives equal chance to all members of the population which
reduces bias. Units to be selected for inclusion within the sample will be chosen using
probabilistic methods and this will therefore guarantee a researcher to make statistical
conclusions from the data collected which will be valid.

Using the formula below

ni = n×pi ; i= 1,2,3

where;

ni = Sample size of stage i

n = Required sample size for all sampled stages which will equal to 288 respondents

pi = Proportion of the population at different stages (i=1,2,3) for all sampled zones

3.6 Validity and reliability of instruments

Before the actual data collection, pilot testing of the questionnaire will be done and a population
of 5%-10% of the sample will be considerably appropriate as suggested by Galloway (1997).
This will aim at testing the instrument reliability and validity.

3.7 Data collection method

To determine the Knowledge Attitude and Practice (KAP) of Over the Top (OTT) tax and
mobile money (mm) tax, a survey will be conducted on students who use over the top services
and mobile money services at the school of statistics and planning. A questionnaire will be used
to collect data from the students and both close and open ended questions will be asked in the
questionnaire.

3.8 Data analysis techniques

This involves the process of transforming all the data obtained into useful information and then
making conclusions on the data. The analysis process also includes examining the data, building
relation of different data types and trends of different factors. Response from the close ended
questionnaire will be analyzed using descriptive statistics of frequency counts, percentage and
inferential statistics of chi-square (×2).

Descriptive statistics of frequency counts and percentages shall be used in analyzing the
demographic variables and research questions while inferential statistics of ANOVA table will
also be used to test the stated hypothesis at 0.05 level of significance.

3.8.1 Univariate data analysis

The data that will be collected from students will be summarized by the use of frequencies for
different variable and these frequencies and percentages will be presented in form of tables.
Under the univariate analysis data analysis, descriptive statistics will be merely used to
summarize a set of sample observations.

3.8.2 Bivariate analysis

Inferential statistics will move beyond the description of specific observations to making
inferences about larger population from which the sample observations will be drawn. Thus
inferential analysis will be used to establish relationships that will be examined through bivariate
data analysis and cross tabulations for all variables and conclusions will be made basing on the
p-value for the results. If the p-value is greater than 0.05 (p>0.05), then there will be no
significant relationship between the two variables that will be considered and chi-square test will
be used to establish the relationship between categorical variables as in the formula below;

X2 = ∑ri=1 ∑cj=1 (Oij–Eij)2/Eij …………………………………………………………..3.2

Where;

X2 =Chi-square test

Oij= observed frequency

Eij= Expected frequency

r = number of rows

c = number of columns

In order to investigate the association between the variables, dependent variables will be cross
tabulated with the independent variables using the Chi- square test.

3.9 Ethical Consideration

The respondents will be treated with respect and courtesy in order to avoid misunderstandings
between the researcher and respondents. The researcher will be further informed of the purpose
of the research study and politely the enumerator will ask for the consent of the respondent to be
used as a collection unit in this study and help in completing the questionnaire. Confidentiality
will be guaranteed with regard to any information they will provide.

A model consisting of any permutation of these variables would probably tell us something
useful about the effects of taxes on economic growth. Unfortunately, this also leads to
consistency problems as researchers can choose very different variables to represent the same
broad ideas.

The independent variable most often used in these kinds of studies is, either some form of
marginal income tax, or an amount based on total revenue collected through taxes.
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