MONGOLIA'S INFORMAL SECTOR Appendix B: Methodologies and Descrptive Statistics 35

# -- Appendix B Informal Sector Survey Methodologies and Descriptive Statistics

100. Seven hundred amd seventy informals were surveyed in the course of this study. About three fourths of the informals were either taxicab or kiosk proprietors, and the remainder were informals operating from one of the outdoor markets or the street. This appendix will outline the survey methodology and the issues involved in estimating value added and incomes. Copies of the survey instruments and tables of descriptive statistics follow at the end of this appendix.

## **Taxicab Sample and Population**

101. A survey of 308 taxicabs was conducted in February, 1997. The purposes of conducting the taxicab survey were many, among them, the desire to be able to aggregate upward and estimate the rough contribution of taxicabs to value added, employment, and income. The difficulties of making such estimations are the same difficulties - facing any study of an informal activity the nature of the activity itself, and its informality, makes it difficult to precisely identify the population and scope of the activity. The difficulty is accentuated with the study of taxicabs, since they are all really just vehicles that are sometimes used for personal use, sometimes for official use, and sometimes as taxicabs, aLll in varying degrees.

102. Taxicabs are mobile enterprises, able to go where there is demand for their services. As such, the sampling of taxicabs for an exploratory study such as this needn't be complicated. The researchers simply hailed down passing vehicles, and by definition anyone who stopped is a taxicab at least part-time. An attempt was made to obtain approximately equal number of observations from each of the six districts within Ulaanbaatar City,"<sup>7</sup> at varying times of the day and night.

### **Adjusting for Over-Sampling Frequently Driven Vehicles**

103. The drivers were asked how many hours they operate their vehicle as a taxicab in a week. The responses to this question provide a sample distribution with a mean of 37.11 hours per week used as a taxi. However, this sample distribution is biased: the more frequently a vehicle is used as a taxicab, the more likely it will be sampled. A technique was developed to adjust the sample frequency to an estimated population frequency, where "population" here means the population of vehicles that are _ever_ used as taxis. The derivation of the adjustment technique follows.

104. Let Fi be the proportion of the population represented by vehicle i, and let Hi be the number of hours in a week that a surveyed automobile is driven as a taxi. Since each observation comprised an equal fraction of the observed sample, and H:Ij is proportional to the probability of being sampled, we can say FiHi=FjHj, for all ij. (I.e. if the sample contains an equal number of cars driven 10 hours as 20 hours, we would expect the actual population to have twice as many cars driven 10 hours as 20 hours, in order for each to occupy equal proportions of our sample.) Choosing a reference observation to be the one with the highest value for hours driven, **Hm** and rearranging yields **Fi/Fm..** = H.,,,/Hi. Rearranging further, summing over i, and recognizing that Fi must sum to 1 yields: <!-- Start of picture text --> Fi =EaxFHmax =1<br>i Hi<br><!-- End of picture text --> <!-- Start of picture text --> Fmeax ]2<br>i Hi<br><!-- End of picture text -->