Classifying Units into Homogeneous Groups: Application of a Two-stage Method to District-level Data on Primary Education in India

Abstract

In development studies, classification of units into different homogeneous groups is often required. Arriving at such a classification becomes complicated when a number of variables are taken into consideration. The standard practice of using an aggregate measure for this purpose has several limitations. The present study applies a two-stage method that attempts to overcome these limitations. It has considered data for 10 indicators of outcome of primary education for 161 districts across India. These districts have been classified into three distinct but homogeneous groups. The classification is such that the districts within a particular group are more or less similar in terms of the indicators of educational outcome, but they differ significantly across the three groups. The two-stage method has also revealed the specific area of disadvantage for each group of districts, thus yielding useful information for policy purposes.

JEL Codes: C18, C38, I21