Asian Journal of Economics, Business and Accounting
21(6): 12-26, 2021; Article no.AJEBA.68104 ISSN: 2456-639X
Is Living in Mwanza Region More Economically Better and Happier than Living in Kagera Region? Finite Mixture (FIMIX) Approach
Ntogwa N. Bundala1*, Deus Dominic P. Ngaruko2 and Timothy M. Lyanga1
1Department of Economics, The Open University of Tanzania, Tanzania. 2Centre for Economics and Community Economic Development, The Open University of Tanzania, Tanzania.
Authors’ contributions
This work was carried out in collaboration among all authors. Author NNB designed the study, performed the statistical analysis, wrote the protocol and wrote the first draft of the manuscript. Authors DDPN and TML managed the analyses of the study. Author TML managed the literature searches. All authors read and approved the final manuscript.
Article Information
DOI: 10.9734/AJEBA/2021/v21i630387 Editor(s): (1) Dr. Ivan Markovic, University of Nis, Serbia. Reviewers: (1) Sudindra V R, International School of Management Excellence (ISME), India. (2) Parul Bhatia, New Delhi Institute of Management, India. (3) Muhamad Saufi Che Rusuli, Universiti Malaysia Kelantan, Malaysia. Complete Peer review History: http://www.sdiarticle4.com/review-history/68104
Received 22 February 2021 Original Research Article Accepted 29 April 2021 Published 04 May 2021
ABSTRACT
The study aimed to uncover the unobserved heterogeneity of the population in Mwanza and Kagera regions. The study examined if living in Mwanza region is more economically better and happier than living in Kagera region. The cross-sectional survey research used with the cross-sectional data from 211 individuals sampled randomly from 4 districts, Nyamagana and Misungwi from Mwanza region, and Bukoba and Muleba from Kagera region. The FIMIX-PLS used to analyse the data. The study found that the population of Mwanza and Kagera regions can be grouped into two mains classes which are class one with a lower annualised income below 1.5 TZS millions per capita and a lower mean score of fundamental psychological factors for happiness (FPFH) in comparing to the class two. The class two is characterised with a higher annualised income about 2.45 TZS millions per capita and a higher mean score of FPFH in comparing to class one. The study evidenced that respondents of Mwanza region have a higher annualised income and FPFH scores than respondents of Kagera region in each class. Therefore, the study concluded that living in Mwanza ______
*Corresponding author: E-mail: [email protected];
Bundala et al.; AJEBA, 21(6): 12-26, 2021; Article no.AJEBA.68104
region is more economically better and happier than living in Kagera region. The study recommended the immigration to seek the economic opportunity and happiness, for example immigration from Kagera region to Mwanza region or nation to nation is encouraged. Moreover, further study recommended by using a panel data to attest the posed facts because this study limited to the cross-sectional data.
Keywords: FIMIX-PLS; immigration; economic growth; factors of happiness (FPFH); hand individual income.
JEL: A12; A 13; A14.
1. INTRODUCTION consensus have been reached on the ongoing debate and adversely it increases a policy Kagera and Mwanza are the two regions in the dilemma for decision makers. Hence, the main Lake Victoria zone that are 370.02 kilometres objective of this study was to examine if living in apart by road metric [1]. The two regions have a Mwanza region is more economically better and historical strong inter-regional trade relationship happier than living in Kagera region. That is, to [2]. Unfortunately, they acutely differ in economic examine if the happiness is associated with the performance. Kagera performs worse than economic growth. The specific objectives were Mwanza region [3,4]. Despite the endless effort of uncovering the hidden subpopulations (classes) Kagera region on improving the economic of the population of Mwanza and Kagera regions performance across the region, its economic by classification of their unobserved growth reported to grow at -0.3 percent in 2018 characteristics or behaviour in the aspects of [3]. The economic performance inequality (EPI) is demographic characteristics environmental still increases across the lake zone. factors, human behavioural factors and economic Unfortunately, no relevant diagnostic of this factors as suggested as the fundamental economic problem has been successfully psychological factors for happiness (FPFH) [14]. attempted to rescue or address this situation. The Kagera investment guide (2019) provides a lot of Logically, because Mwanza region has a higher economic promises with less probability of economic growth than Kagera region, then it achievement. That it, is still unknown which are implies that the Mwanza region residents are unobserved heterogeneity that cause the happier than that of Kagera region. To test this inequality of economic performance in Mwanza general hypothetical statement a researcher used and Kagera regions. Clearly, it is still unknown finite mixture partial least squares (FIMIX-PLS) why Mwanza is economically well-off than Kagera and finite mixture models (FMM). Both FIMIX- region. PLS and FMM are method to uncover unobserved heterogeneity in the inner (structural) In addition, it is not yet confirmed that the model [15]. They capture heterogeneity by economic growth in Mwanza is associated with estimating the probabilities of class memberships happiness of the producers as the debate on it is for each population (observation) and not ended. Researchers reached diametrically simultaneously estimate the path coefficients for opposed conclusions. For example, Easterlin all classes [15]. And, then the determination of [5,6] empirically evidenced the paradox effects on characteristics of the producers each class was income and happiness (subjective well-being). done. Moreover, some recent studies, such as Roka [7], Semeijn, van der Heijden and de Beuckelaer [8], 1.1 Conceptual and Data Analytics Meyer and Hamilton [9], Li and Shi [10] and Framework Stevenson and Wolfers [11,12] evident the significant positive effects of subjective well-being The basic concept of this study was to uncover or (happiness) on the economic growth, while examine the unobserved heterogeneity of the Stoop, Leibbrandt and Zizzamia [13] confirmed producers in Mwanza and Kagera regions. At the negative effects of subjective well-being first examination the structural linear relationship (happiness) on the economic growth. These was established by using PLS-SEM. In this stage findings create a contradictory evidence gap that the beta coefficients of the linear relationship this study worked on it. Until now there is no between the FPFH and economic growth was
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Bundala et al.; AJEBA, 21(6): 12-26, 2021; Article no.AJEBA.68104
established by using the basic or normal the inner measurement model on the diagonal application of PLS. Therefore, the study and zero else, and ρ is a vector of the K mixing examined the unobserved heterogeneity of the proportions of the finite mixture. PLS path influence of FPFH on economic growth. The study used the methods of modelling the Now, for maximization of the vector of latent unobserved heterogeneity of the linear relations endogenous variable ( ), the objective function suggested by Hahn, Johnson, Herrmann and is the likelihood function for N vectors. The Huber [16]. In this analytics the inner structural likelihood function (L) is given by:- model was considered. PLS-SEM has two types of measurement models, the outer measurement ⎡ ⎡ ⎤⎤ |Β | 1 models which involve the reflective and formative ⎢ ⎢ ⎥⎥ L = ⎢ ρ exp − Β η + Γ ξ ′Ψ Β η + Γ ξ ⎥ (4) ⎢ 2 ⎥ indicators relations and the inner measurement or ⎢ 2π |Ψ | ⎥ ⎣ ⎣ ⎦⎦ structural models that involve the relationship among the latent variable (endogenous and The mixing proportion ρ signified as prior exogenous variables). For the purpose of this probabilities of any item belonging to K study the inner measurement or structural model subpopulations (latent classes). Therefore, was considered, because the study aimed to posterior probability membership for item iin uncover the unobserved heterogeneity of the subpopulation k ( ik) is computed by using Bayes’ relationship between the endogenous and theorem under the conditioned estimates of exogenous latent variables. Therefore, according class-specific parameters ρ , Β , Γ and to Hahn et al. [16], the inner measurement model can be expressed as: Ψ [13]. That is,