Quantitive Research Methods Quantitative Research

Quantitive Research Methods

Quantitative Research Methods

The specialized literature has placed an increased focus onto the study of dependent and independent variables. The list of such correlations is endless, the reader being able to easily identify relationships between income, levels of education or residential neighbourhood. The current essay will establish a correlation between the populations living standards materialized in household income, and education, age of the individuals in the household, as well as their races. The dependent variable, household income or wealth, is determined by independent variables education of the household members, age of the household members and race. The preliminary supposition is that the three independent variables affect wealth; the most important independent variable in this relationship is given by the level of education possessed by each member registering an income. This is generally because of the constantly widening income gap between the households run by a college graduate and the households run by people who do not possess a college degree. "Household wealth is strongly correlated with education. According to the 2004 Survey of Consumer Finances from the Federal Reserve, median wealth varied from over $225,000 for households led by someone with a college degree to under $21,000 for households led by someone without a high school diploma. Further, the disparity has risen significantly over the prior 15 years. Over that period, real median wealth increased 37% for those with a college degree, while it fell over 40% for those without a high school degree" (Hoyt, 2006)

2. Definition of Variables

Household income

The household income is a generic measurement tool of the wealth of a family and it is composed from the incomes coming from various sources, such as wages, salaries, premiums, bonuses, self-employment benefits, dividends, interests or pensions, registered by all relatives living under the same roof and which are 15 or older (U.S. Census Bureau, 2000). The average household income for 2005 was of $46,326 and when correlated with inflation, it revealed a 1.1% increase as compared to the previous year. 2005 represented the first year with real annual increase since 1999. Compared to 1967, the first year since household incomes are available, the increase is of 30.9% (Official Website of the White House, 2008). The trend is revealed in the chart below.

Education

Education is the primary independent variable affecting the household income. The variable is generally determined by the schools graduated by the household members, such as primary schools, high schools or colleges. The basic tendency is for the income to increase as the household members possess higher levels of education (U.S. Department of Labor, 2006). In this order of ideas, more and more adolescents choose to graduate from high school (about 90%) and more than half of them (about 60%) choose to go to college (U.S. Census Bureau, 2002). But possessing a college degree is not guarantee enough for a high salary. For instance, to get a significantly increased wage, an individual would have to attend the courses of specialized schools, and get diplomas for master's degree or doctoral degrees. Given the strong correlation between household income and education attainment, the state officials have made several programs available to the public, through which adults can continue their studies and become further specialized.

Race

The race or ethnicity of the household members represents the second independent variable influencing the family's income. The specialized literature has often identified five categories of races: white, African-American, American Indian, native Hawaiian or other Pacific regions, or other races (U.S. Census Bureau, 2000). Most recently, the Hispanic race has been a common presence within household income studies. Generally, the white and native population will register the higher incomes.

Age

The age of the household members is yet another independent variable influencing the income. The studies conducted along the years have generally identified seven age groups: 15 to 24, 25 to 34, 35 to 44, 44 to 54, 55 to 64, 65 to 74 and 75 and over (U.S. Census Bureau, 2000). However varying results can occur within the studies conducted by the specialized agencies at various times, the latest results indicate that the median age population possesses the largest household incomes.

3. Data Description

Education

As it has been mentioned before, as education increases, so does the household income. "And usually, those extra earnings are more than pocket change" (U.S. Department of Labor, 2006). A study conducted by the United States Department of Labor in 2005 revealed that the differences in weekly earnings registered by the individuals without a high school diploma and individuals possessing doctoral studies can total up to $1,012. Also, the differences are easily noticeable between consecutive levels. For instance, an individual who has finished high school but did not go to college will make about $583 per week, whereas the individual who has dropped out of college will only make $409 per week. The actual statistics are revealed in the chart below:

Source: Education and Income: More Learning is Key to Higher Earnings, U.S. Department of Labor, Bureau of Labor Statistics

As the trend becomes more and more obvious, the young population decides in favour of education, in the detriment of dropping out of school and getting a low paid position. As a results, "we are mode educated than ever. In 2000, 84% of American adults ages 25 and over had at least completed high school; 26% had a bachelor's degree or higher. Both figures were all-time highs" (U.S. Census Bureau, 2002).

Race

The race or ethnicity of an individual represents the third independent variable that influences the household income. Generally, there has been observed a wide gap between the incomes realized by households held by white Americans and other races. Currently however, the gap seems to be narrowing.

A study conducted in 2000 by the U.S. Census Bureau retrieved the following information for the year 1999:

the median average of the household incomes realized by all races was of $41,994 the white population registered a median household income of $44,687 the African-American registered a median income of $29,423 the American Indian had an average household income of $30,599 the native Hawaiian and other Pacific Islanders owned households registered incomes of $42,717 other minorities registered a mean household income of $32,694 the Hispanics realized an annual average of $33,676 (U.S. Census Bureau, 2000)

In 2004, the white population still registered the highest incomes, and it was being followed by the Asian, African-American and Hispanics.