CHAPTER FOUR
PRESENTATION OF ANALYSIS OF RESULTS
Having estimated the model, the variables considered are Real Gross Domestic Product (dependent variable), Government Expenditure on Health and Government Expenditure on Education (independent variable). It covers the period of years 1983 - 2010.
4.1 Presentation of Result
The research work employed the use of multiple regression model based on ordinary least square (OLS) method.
RGDP = +234627.4 + 1.622 GEE + 0.926 GEH
T* = (22.496) (3.249) (1.384)
S.E = (10429.8) (0.4991) (0.669)
t0.025 = 2.056
F(2, 25) = 266.82
f0.05 = 3.39
R2 = 0.955249
DW = 0.83
4.2 Analysis of Results
T-test: The calculated t-value for the regression coefficient of GEE and GEH are 3.249 and 1.384 respectively. The tabulated t-value is 2.056. Since the calculated t-value of GEE is greater than the tabulated t-value at 5% level of significance; we conclude that its regression coefficient is statistically significant. However, the regression coefficient of GEH is not significant.
Standard Error Test: It is used to test for statistical reliability of the coefficient estimate.
S (b1) = 0.4999 S(b2) = 0.669
b11/2 = 0.811 b21/2 = 0.463
Since S(b1) < b11/2, we conclude that the coefficient estimate of S(b1) is statistically significant. However, coefficient estimate of S(b2) is not statistically significant.
F-test: the F-calculated value is 266.83 while the F-tabulated value is 3.39 at 5% level of significance. Since the F-calculated value is greater than the F-tabulated value, we conclude that the entire regression plane is statistical significant. This means that the joint influence of the explanatory variables (Government Expenditure on Education and Government Expenditure on Health) on the dependent variable (Real Gross Domestic Product) is statistically significant. This result can as well be confirmed from the F-probability which is statistically zero.
Coefficient of Multiple Determination (R2): The computed coefficient of multiple determination (R2= 0.955249) shows that 95.53% of the total variations in the dependent variable (RGDP) is accounted for, by the in the explanatory variables namely Government Expenditure on Education (GEE) and Government Expenditure on Education (GEH) while 4.47% of the total variation in the dependent variable is attributed to the influence of other factors not included in the regression model.
Durbin Watson Statistics: It is used to test for the presence of positive first order serial correlation. The DW is 0.83. At 5% level of significance with two explanatory variable and 28 observations, the tabulated DW for dL and du are 1.255 and 1.560 respectively. The value of the computed DW is less than the lower limit. Therefore, we conclude that there is evidence of positive first order serial correlation.
4.3 Test of Hypothesis
The specific objective of the study is to examine the effect of human capital development on economic growth of Nigeria. With respect to this, the null hypothesis is stated as follows;
H1: That Human capital development has a significant effect on economic growth of Nigeria.
F-test is employed in testing the above hypothesis. Using 5% level of significance and 2/28 degrees of freedom, the F-tabulated value is 3.39 while the F-calculated value is 266.83. Since the F-calculated value is greater than the F-tabulated value, H0 is rejected. Thus, H1 is accepted on the proposition that Human capital development has significant effect on economic growth in Nigeria within the period under study i.e. 1983-2010.
4.4 Implication of the Result
The regression result shows that there existed a positive relationship between the dependent variable (RGDP) and the explanatory variables (GEE and GEH). It is estimated from the result that N1 increases in Government Expenditure Education and Government Expenditure on Health, on the average, will lead to increase by N1.62k and 93kobo in RGDP respectively. However, holding the explanatory variables constant, RGDP increases by N234, 627. It is obviously seen that the sign borne by parameter estimate meet the a priori expectations. This implies that human capital development through the increase in Government Expenditure on Health and Government Expenditure on Education will boost the economic growth in Nigeria.
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