Hypothesis Testing of MGNREGA - 3

  Hypothesis Testing of Mahatma Gandhi National Rural Employment Guarantee Act with Data (Case - 3)

Hypothesis - 

H0 = MGNREGA has not reduced the poverty in India. 

H1 = MGNREGA has reduced the poverty in India. 

Note: You can use following statistical tests if you have enough primary or secondary data - 

1. Z - Test -  (z = (x — μ) / (σ / √n)
2. T - Test - t = (x1 — x2) / (σ / √n1 + σ / √n2)
3. Chi-Square Test - Χ2 = Σ [ (Or,c — Er,c)2 / Er,c ]

The Mahatma Gandhi National Rural Employment Guarantee Act programme reduced poverty by up to 32 per cent and prevented 14 million people from falling into poverty. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREG's) reduced poverty by up to a third and gave a large number of women their first opportunity to earn cash income. Officials from the Ministry of Rural Development (MoRD) and the National Council of Applied Economic Research (NCAER) released report, which used data from two rounds of the India Human Development Survey (IHDS) – 2004-5 and 2011-12. The survey was conducted by the NCAER and University of Maryland, involving over 26,000 rural households across the country.

Comparisons between the two survey rounds found that the programme reduced poverty overall by up to 32 per cent and prevented 14 million people from falling into poverty. “Economic growth contributed to overall poverty reduction during this period, but we found that the MGNREG's also played a significant role,” Sonalde Desai, principal author of the study, said. 

MGNREGA’s impact on Poverty - 

Figure: MGNREGA's Impact on Poverty:

Data: The Hindu

The part of the rural job market that the MGNREG's did seem to have a more significant impact on was for female work. About 45% of female MGNREG's workers were either not working or worked only on a family farm in 2004–05, indicating that the MGNREG's “may well be the first opportunity many women have to earn cash income”. As a result, there was a substantial increase in women’s control over resources including cash in hand and the likelihood of having a bank account and improvement in women’s ability to make independent decisions about their health, the report found.

Here, the poverty rate has been decreased under the MGNREGA in India (Maharashtra), We will reject the Null Hypothesis (H0) and will accept the Alternative hypothesis (H1).

Hence, Alternative Hypothesis (H1) is positively proved. 

Note: This is an example from my college project, which I thought would be great if I share over here.

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