Validation
Methodology
Rationale for
Weights |
VALIDATION
:
Validation of MPV was done using the state level information, on usage of various
consumer goods and ownership of durables.The correlations are high, giving us confidence
in the validity of MPV.The state values of MPV were calculated on a
"bottom-up" manner .i.e. by adding up district MPVs.Thus the high
correlations observed at the state level are also an indirect validation of the district
data.
| Correlation |
Consumer
goods |
Durables |
Total |
| More than 0.558** |
5 |
15 |
20 |
| 0.412 - 0.558* |
- |
1 |
1 |
| Less than 0.412 |
- |
2 |
2 |
** is statistically significant at 1% level
* is statistically significant at 5% level
METHODOLOGY :
District parameters have been used to measure market potential.
Adapting GDP logic, the market potential of every district was measured taking into
account the sectoral contribution of agriculture, industry and infrastructure.The presence
of active prospects in each district has been included.
Agricultural prosperity has been measured by the :
1. Value of output of major crops averaged over three years 1990-1993.
Industrial prosperity has been measured by the :
2. Bank advances to the industry, which reflect the level of operations and
employment
in industry.
Infrastructural prosperity has been measured considering the
following factors
3. Bank deposits
4. Bank credit to trade
5. Petrol & Diesel consumption
The presence of active prospects or people with assets, a regular
income and an
inclination to improve their standard of living has been measured
by the following
parameters :
6. The number of cultivators and agricultural labourers
7. The number of large landowners measured by the average size of operational
holdings
8. Number of workers employed in mining and quarrying
9. Urban population
10.Literate population
These ten parameters were applied to each district and prosperity measured on a per
capita basis arriving at a Market Potential Index(MPI) for each district.
MPI was then adjusted to the population of the district to arrive at MPV or the
Market Potential Value.The ten parameters have been regrouped to indicate
contribuions from each of the three sectors, parameters 1, 6 & 7 measure agriculture,
2 and 8 measure industry and the other five measure infrastructure.
MPI is a weighted index; the weights used being proportinate to the sectoral contribution
of agriculture, industry and infrastructure to GDP.
RATIONALE FOR WEIGHTS :
For purposes of weighting, the structure of GDP at the AllIndia level was used as a base
to estimate sectoral potential at the district level.The weights applied to the ten
parameters are :
| Structure
of GDP at current prices for 1995-96 |
Corresponding weights for MPI |
| Sector |
% |
Parameter |
Weight |
Agriculture
Industry &
mining
Infrastructure |
29.5
29.0
41.5
|
1. Per capita value
of output of major crop
2. Average size of operational
holdings
3. Cultivators &
agricultural
labourers
4. Bank advances to industry
5. Employment in
mining quarrying
6. Bank deposits
7. Bank credit to
trade
8. Fuelconsumption
(petrol & diesel)
9. Literate population
10.Urban population |
0.240
0.037
0.018
0.218
0.073
0.156
0.104
0.052
0.026
0.078
|
| Total |
100.0 |
|
1.000 |
|
