**MONGOLIA'S INFORMAL** SECTOR -

Appendix B: Methodologies and Descriptive Statistics

**36**

Remembering that Fi = Fm,x HmJ/Hi, and canceling out the Hmax, we have: <!-- Start of picture text --> H<br>F. ,<br>iH.<br><!-- End of picture text --> 105. This equation provides the basic adjustment for the population frequency. Figure 8 illustrates the frequencies of hours driven in a week, generated by the sample survey (labeled "sample"), and adjusted using the procedure outlined above (labeled "population").

106. The effect of the population adjustment is to reduce the mean average hours used as a taxi in a week from 37.1 to 17.8. As can be seen from Figure 8, the proportion of vehicles used less than, say, 20 hours per week is much larger after adjusting for the sample selection bias, consistent with the notion that many vehicles are driven as taxicabs only parttime.

<!-- Start of picture text --> Hours Used as a Taxi in a Week<br>Sample and Population Frequencies<br>40%<br>30%<br>20%<br>10% 9'\<br>0%<br>51)<br>hours per week 110<br><!-- End of picture text --> 107. In the preceding paragraphs we derived estimates related to the population of vehicles that are _ever_ used as taxicabs. **0%** We must also account for the fact that some vehicles are never used as taxicabs - **51)** such vehicles would not be sampled at all, and would therefore not be accounted for hours **per** week in the above population adjustment. Now **Figure 8** we address the issue of the true population _Source:_ Author's survey of taxicabs. of vehicles within Ulaanbaatar, and the methods used to estimated what percentage of vehicles are _never_ used as taxicabs.

108. The number of vehicles in Ulaanbaatar is enumerated by the Ulaanbaatar City Road Police, and can be broken down into two categories depending on the type of "numbers""s with which each vehicle is registered. There are frequent, random, checks of registration papers by the traffic police, annual fees for registrations, and annual technical inspections, so it is reasonable to assume that the number of vehicles registered is very close to the actual number of vehicles in operating condition. The population of taxicabs is a subset of the population of vehicles. If we can estimate the proportion of vehicles that are _never_ used as taxicabs, we can identify the population of taxicabs to which we can apply the frequency derived above and arrive at aggregates.

109. Two approaches were used to address the question of how many vehicles in Ulaanbaatar are never used as taxicabs. The first method is to make educated guesses and solicit the guesses of Mongolians. (The final estimates of aggregates are not terribly sensitive to this guess, so broad upper and lower bounds are acceptable.) Mongolians universally estimate the percentage of vehicles never used as taxis to be very close to zero, and certainly no higher than 10%. The second approach is to fit the population distribution derived above to a standard distribution, and estimate the proportion of vehicles used as a taxi zero hours per week, based on the fit of the distribution. Experiments with the Poisson distribution, choosing the Poisson parameter to optimize the fit over the relevant portion of the population distribution derived above, suggest a distribution whose mode is not zero, but some