Method of data analysis
A random utility model can be used to analyze the dichotomous
choice between participating and not participating in a Micro
Pension Scheme by urban informal workers. As stated by Adhikari
et al. (2003) the utility function of a participant in this case is not
directly observable, so utility is treated as a random variable in the
participation model. From this perspective, the random utility model
evaluates the probability that an urban informal worker would
participate in a Micro Pension Scheme based on the information
that describes the decision makers (in this case the urban informal
worker). The Willingness to participate (WTP) can also be thought
of as a function of the socio-economic, demographic, and attitude,
characteristics of the urban informal workers, in addition to the cost
of the Micro Pension Scheme with regards to the premium
contributions. Since the costs of the Micro Pension Scheme are not
available and also the study is that of an exploratory nature trying to
look at the feasibility of a Micro Pension Scheme, design options or
features were rather considered. The willingness to participate
(WTP) in a Micro Pension Scheme was assumed to be
dichotomous; that is, whether or not urban informal workers are
willing to participate in the Micro Pension Scheme. The Binary Logit
model was used to examine the willingness of urban informal
workers to participate in a Micro Pension Scheme. The objective of
the Logit model is to estimate the probability of participating in the
Micro Pension Scheme. The Logit model belongs to the general
class of binary choice models, where the dependent variable is
dichotomous (Islam et al., 2001; Maddala, 1983; Greene, 2002;
Magnac, 2002). The Binary Logit for the urban informal workers‟
willingness to participate (WTP) is specified as follows:
Method of data analysisA random utility model can be used to analyze the dichotomouschoice between participating and not participating in a MicroPension Scheme by urban informal workers. As stated by Adhikariet al. (2003) the utility function of a participant in this case is notdirectly observable, so utility is treated as a random variable in theparticipation model. From this perspective, the random utility modelevaluates the probability that an urban informal worker wouldparticipate in a Micro Pension Scheme based on the informationthat describes the decision makers (in this case the urban informalworker). The Willingness to participate (WTP) can also be thoughtof as a function of the socio-economic, demographic, and attitude,characteristics of the urban informal workers, in addition to the costof the Micro Pension Scheme with regards to the premiumcontributions. Since the costs of the Micro Pension Scheme are notavailable and also the study is that of an exploratory nature trying tolook at the feasibility of a Micro Pension Scheme, design options orfeatures were rather considered. The willingness to participate(WTP) in a Micro Pension Scheme was assumed to bedichotomous; that is, whether or not urban informal workers arewilling to participate in the Micro Pension Scheme. The Binary Logitmodel was used to examine the willingness of urban informalworkers to participate in a Micro Pension Scheme. The objective ofthe Logit model is to estimate the probability of participating in theMicro Pension Scheme. The Logit model belongs to the generalclass of binary choice models, where the dependent variable isdichotomous (Islam et al., 2001; Maddala, 1983; Greene, 2002;Magnac, 2002). The Binary Logit for the urban informal workers‟willingness to participate (WTP) is specified as follows:
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