Regression Analysis on National Income From 1998 – 2003
CHAPTER ONE
AIMS AND OBJECTIVES
In view of Nigeria’s economic predicament, the project is aimed at investigating the relationship existing between disposable income, savings and government Investments for the purpose of suggesting solutions to our economic problems.
After the regression analysis had been carried out, it will supply solution to the following questions:
- To determine the impact of national income savings on economic growth in Nigeria.
- To ascertain the impact of gross domestic investment on economic growth in Nigeria.
CHAPTER TWO
REVIEW OF RELEVANT LITERATURE
The Concept of Time Series Analysis
The term “time series” is a collection of observations made sequentially in time. Time series are stochastic in nature because randomness and probability are attached to its observations. Nwachukwu [5], said that the need to monitor, evaluate and make adequate plans for the future compel managers, scientists of various calling and researchers alike to collect data on regular basis on process that vary as time passes. Observation on such processes when arranged in chronological order (in time sequence) is called time series. Paul [7], in his contribution to the importance of time series model said that modern time series forecasting methods are essentially rooted in the idea that the past tells us something about the future. The question of how exactly are we to go about interpreting the information encoded in past events and furthermore, the question of how we are to extrapolate future events based on previous information, constitute the main subjective matter of time series analysis.
TIME SERIES STUDIES ON ECONOMIC GROWTH
Hatef, Altaee, Al-Jafari applied the Autoregressive Distributed Lag (ARDL) model to examine the determinants of economic growth in Saudi Arabia between 1980 and 2004. Their findings revealed that there is a long relationship among the variables such as import, export, real GDP, real gross fixed capital formation and financial development. In addition, they concluded that gross fixed capital formation, export and financial development significantly influence the long-run economic growth in Saudi Arabia; and that the equilibrium is restored within the mid of the year if there is any shock to the long-run relationship. Similarly, Shahbaz, Ahmad and Chaudhary (2008) examined the economic growth in Pakistan using quarterly data from 1991 to 2007. Their results from advanced ARDL model and log-linear model showed that credit to private sector as a proxy for financial development, FDI and inflow of remittances exhibit a positive correlation with the long-run economic growth. However, high inflation rate and trade openness reduce the growth rate in both the short-run and the long-run.
Ajide (2014) employed a time series analysis to examine the determinants of economic growth in Nigeria for the period, 1980-2010. He added an institutional variable proxied as economic freedom to capital, FDI, labour, life expectancy, financial variable, real GDP, and degree of openness; into the multivariate regression model, in order to establish the link between economic growth, foreign direct investment (FDI) and institution. His findings showed that labour, life expectancy, the degree of openness and economic freedom influence the level of the country’s economic growth at different significant levels. The outcome of a disaggregated model pointed out that freedom of international trade has a positive impact on economic growth but the size of government adversely affects the economic growth. Biswas and Saha (2014) analysed the macroeconomic determinants of economic growth in India between 1980 and 2011, using vector error correction model (VECM). Their findings suggested a long-run link between economic growth and the concerned explanatory variables such as gross domestic capital formation, employment, export, FDI, and money supply. However, inflation and fiscal deficit adversely affect the growth rate. The short-run GDP is substantially driven by the country’s gross domestic capital formation.
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
Ex-post facto research design was adopted in carrying out the study. Ex-post facto research design is a type of research design that utilizes existing data on past events (Onwumere, 2005). Such data are already in existence and are not manipulated. The justification for using this design is that the study will utilize already existing quantitative data on past events for which the relevant variables cannot be manipulated.
Quantitative data on research variables will be generated on quarterly basis from secondary sources, namely: CBN Statistical Bulletin, International Financial Statistics, World Bank and OECD Account Data files.
Description of Research Variables
Gross National Income (GDP): A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), gross national product (GNP), net national income (NNI), and adjusted national income (NNI adjusted for natural resource depletion.
The number includes the nation’s gross domestic product plus the income it receives from overseas sources. GNI is an alternative to gross domestic product (GDP) as a means of measuring and tracking a nation’s wealth and is considered a more accurate indicator for some nations.
CHAPTER FOUR
DATA ANALYSIS AND PRESENTATION
INTRODUCTION
The test results suggest that the null hypothesis of unit root for the three time series namely, Economic Growth proxy on Gross National Income (GNI), Gross Domestic Savings (GDS) and Gross Domestic Investment (GDI) cannot be rejected at levels. This prompted us to test the Augmented Dickey-Fuller (ADF) and Philip Peron (PP) tests at first and second levels. The result as shown in table 1 suggests that the null hypothesis of the variables can be rejected in the first difference. These shows that all the variables are stationary at first difference and are integrated of order one or are 1(1) series. The test results are presented below:
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was the Regression analysis on national income from 1998 to 2003.
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations are made, which in the opinion of the researcher will be of benefit in addressing the challenges of adolescent attitude to parental discipline.
Summary
This study aimed at having a critical analysis of adolescent attitude to parental discipline. Objectives were raised. These objectives include:
- To determine the impact of national income savings on economic growth in Nigeria.
- To ascertain the impact of gross domestic investment on economic growth in Nigeria.
Chapter two was the review of relevant literature, the methodology for the research was outlined in chapter three. Analysis of the data collected was done and presented in tables for easy comprehension in chapter four.
Conclusion and recommendations
In this work we found that Gross domestic savings have no significant impact on National income and economic growth in Nigeria and the change in gross domestic investment has positive and significant implication on National Income and the change in economic growth in Nigeria.
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