Determining the Effects of Banks Privatization through Data Analysis

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It is important to deteermine the effects that privatization of banks have on the general public interms of whether it makes banking services better or not. To assess how individuals from different bank sectors, both private and public, view privatization in terms of efficiency of service delivery and employment creation, a sample of 30 active individuals were investigated.

The hypothesized scenario is that privatization is seen as a tool to increase performance/efficiency and create more employment opportunities. There was a need for carrying out a study to test this hypothesis.

Data was collected from the sample obtained so as to test the hypothesis. The data was collected through use of questionnaires which provided all the required information for the test. The data contained four different variables namely privatization (Yes/No), Efficiency (Yes/No), Employment (Yes/No) and Type (Private/Public) (Klugh, 1986).

A regression analysis was carried out to determine if there was any relationship between privatization and efficiency. The test would hence prove whether privatization actually resulted to an increase in the efficiency of services rendered. The regression analysis produced the following output:

Regression Analysis Output from STATA Software

Regression Analysis Output from STATA Software.

From the results obtained, the correlation coefficient for the test between privatization and efficiency was 3.61e-15 with a p-value of 0.000. at 5% level of significance, the p-value is greater than the critical value, 0.05.

Hence the correlation is significant and so we conclude that there is a significant correlation between privatization and efficiency. This simply means that privatization results to increased efficiency and hence should be embraced if there is a need for improvements in service delivery (Klugh, 1986).

The correlation coefficient for privatization and type of bank is also significant at 5% level of significance since it is less than 0.005. Hence, the type of bank, whether private of public, determines the views pertaining to whether it is important to privatize banks (Triola, 2009).

However, since the correlation coefficient for privatization and employment, 0.215, is not signifiocant since it is greater than 0.05 at 5% level of significance, then there is no significant change in employment as a result of privatization of banks. This implies that privatization of banks cannot have a significant effect on the rate of employment.

Generally, the regression analysis has provided enough evidence to prove that the main way in which service delively by banks would be improved would be through privatization of the banks.

Since the private sector is usually characterized by more competition and advancement in technological utilization, then there is no doubt that there is improved efficiency in thquality of services provided. Therefore, it is important for all the stakeholders to seek for more ways of ensuring privatization of banks so as to improve service delivery to customers (Triola, 2009).

List of References

Triola, F.(2009). Elementary Statistics (11th ed). New York, ACM

Klugh, H. (1986). Statistics: The Essentials for Research. London: Academic Press.

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