An Empirical Analysis of Profitability across Different Sizes of Mat Production Units in Sabang Block of Paschim Medinipur District, West Bengal

Abstract

The present study examines the determinants of profitability among mat production units in Sabang Block of Paschim Medinipur District. Mat production is an important rural cottage industry that provides employment and livelihood opportunities to a large section of rural households. The study applies Multiple Regression Analysis using the Ordinary Least Squares (OLS) method to identify the influence of economic and socio-economic variables on profitability. The analysis incorporates variables such as raw material cost, labour cost, capital investment, output, experience, education, and size of unit. The findings reveal that raw material cost, capital investment, output, experience, education, and size of unit positively affect profitability, whereas labour cost negatively influences profit. The model explains 87 percent of the variation in profitability, indicating a strong explanatory power. The study suggests that expansion of production scale, improvement in education and skill development, and efficient resource utilization are essential for enhancing profitability in the rural mat industry.