RESEARCH DESIGN AND METHODOLOGY OF AN ASSESSMENT ON IMPACT OF HUMAN CAPITAL DEVELOPMENT ON ECONOMIC GROWTH OF NIGERIA (1980-2008)



In attempt to determine the effect of human capital development on economic growth in Nigeria, it is necessary to develop a model to justify the correlation that exists between the variable. In this regard, a multiple regression model is this developed to determine the effect of human capital development on economic growth.

MODEL SPECIFICATION
          In this study, hypothesis has been stated with the view of examining the relationship between human capital development with Economic growth in Nigeria. In capturing the study, these variables were used as proxy.
          Thus, the model is represented in the functional for. It is shown as below:
               RGDP     =       f(GEH, GEE)  ------------------     3.1

 Where
RGDP =       Gross Domestic Product (dependent variable)
GEH   =        Government Expenditure on Health
(independent variable).
GEE    =         Government Expenditure on Education (independent variable).
In a linear function, it is represented as follows:
RGDP  =   β0  +   β1 GEH  +  β2GEE  +  ut    ---------------- 3.2
Where
β0       =       Constant term
β1       =       Regression coefficient of GEH
β2       =       Regression coefficient of GEE
ut      =       Error term

MODEL EVALUATION
At this level of research, using a time series data, the researchers estimates the model with Ordinary Least square Method is preferred to other as it is best linear  unbiased estimator, minimum variance, zero mean value of the random term, etc (Gujarati, 2004).
The tests that will be considered in this study include: coefficient of multiple determination (R2), standard error test (S.E.), T-test, F-test, and Durbin Watson statistics.
Coefficient of Determination (R2): It is used to measure the proportion of variations in the dependent variable, which is explained by the explanatory variables. The higher the (R2) the greater the proportion of the variation in the independent variables.
          Standard Error test: It is used to test for reliability of the coefficient estimates.
Decision Rule:
          If S.E < ½ b1, reject the null hypothesis and conclude that the coefficient estimate of parameter is statistically significant. Otherwise accept the null hypothesis.
          T-test: It is used to test for the statistical significance of the individual estimated parameters. In this research, T-test is chosen because the population variance is unknown and the sample size is less than 30.
Decision:
          If T-cal > T-tab, reject the null hypothesis and conclude that the regression coefficient is statistically significant. Otherwise accept the null hypothesis.
  F-Test: This is used to test for the joint influence of the explanatory variables on the dependent variable.
Decision rule:
If  F-cal > F-tab, reject the null hypothesis and conclude that the regression plan is statistically significant. Otherwise accept the null hypothesis
Durbin Watson statistics: It is used to test for the presence of autocorrelation (serial correlation).
Decision rule:
          If the computed Durbin Watson statistics is less than the tabulated value of the lower limit, there is evidence of positive first order serial correlation. If it is greater than the upper limit there is no evidence of positive first order serial correlation. However, if it lies between the lower and upper limit, there is inconclusive evidence regarding the presence or absence of positive first order serial correlation.

SOURCE OF DATA
          The data for this research project is obtained from the following sources:
i.                Central bank of Nigeria statistical bulletin for various years.
ii.                Central Bank of Nigeria Annual Account for various years.
iii.               Central Bank of Nigeria Economic and financial Review for various years.
REFERENCES
Central Bank of Nigeria Statistical Bulletin, volume 18, Dec., 2008

Gujarati, D.N. (2004). Theory of Economics United State Military Academy west point, Mc Graw-Hill inc Book co. Singapore

Koutsoyiannis, A. (2001), Theory of Econometrics: Pal Grave Houndmills,            Basingstoke, Hamshire RG21 6xs and 175 fifth Avenue, New York, NY10010.

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