CHAPTER THREE
RESEARCH METHODOLOGY
3.1 Model Specification
The research study of evaluates the implication of human capital development on the economic growth of Nigeria. In capturing the study, these variables were used. Thus the model is represented in a functional form. It is shown below
Where
RGDP= Real Gross Domestic Product (Dependent variable)
GEE= Government Expenditure Education (Independent variable)
GEH= Government Expenditure Health (Independent variable
In a linear function, it is represented as follows:
GDP=b0 + b1 GEE + b2 GEH +Ut…………..3.2
Where
b0 = Constant Term
b1 = Regression Co-efficient of GEE
b2 = Regression Co-efficient of GEH
Ut = Error Term
3.2 Model Estimation
As the data for the analysis is obtained, the next task is to estimate the parameters of the function. The numerical estimates of the parameters give the empirical content of the function specified. Thus, regression analysis shall be used by the research for the model estimation.
3.3 Method of Evaluation
This is the examination of the specified as parameters estimates which are to be tested with some statistical criteria. However, it is good to recognize the a priori sign of the parameters. Thus there are expected positive signs between GDP as the dependent variable and the explanatory variables, GEE and GEH.
Using a time series analysis data, the researcher estimates the model with ordinary least square method. This method is preferred to others as it is best linear method unbiased estimator, minimum variance, zero mean value of the random terms etc (Koutsoyiannis, 2001).
The tests that will be considered in this study include:
Coefficient of multiple determinations (R2)
Standard Error Test (S. E)
T-test
F-test
Durbin Watson Statistics
TOPIC: HUMAN CAPITAL DEVELOPMENT: IT’S IMPLICATION ON ECONOMIC GROWTH
TO GET THIS COMPLETE MATERIAL
PRICE:
Pay #5,000 Naira, (i.e. the price
for this material) into our account.
ACCOUNT DETAILS:
Bank: Ecobank
A/c No: 2691085510
Name: Martins Chima
NEXT STEP:
Send your teller no, name and email
address to 07030722911. We will confirm your payment within 3hrs (working
hours) and you will receive this topic material immediately after confirmation
through your e-mail.
We will also send a text
message to your mobile phone number informing you that we have sent you the
COMPLETE MATERIAL.
Coefficient of multiple determinations (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 dependent variables.
Standard Error Test (S.E): it is used to test for the reliability of the coefficient estimates.
Decision Rule
If S. E < 1/2b1 reject the null hypothesis and conclude that the coefficient estimate of the parameter is statistically significant otherwise accept the null hypothesis.
T-test: it is used to test the statistical significance of individual estimated parameters. In this research, T-test is chosen because the population variance is known and the sample size is less than 30.
Decision Rule
If T-cal > F-tab, reject the null hypothesis and conclude that the regression coefficient is statistically significant. Otherwise accept the null hypothesis.
F-test: it 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 plane is statistically significant. Otherwise, accept the null hypothesis.
Durbin Watson (DW): 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 is greater than the upper limit there is no evidence of positive first order serial correlation. However, if it lies between the lower and the upper limit, there is inconclusive evidence regarding the presence or the absence of positive first order serial correlation.
3.4 Sources of Data
The data for this research project is obtained from the following sources:
i. Central Bank of Nigeria statistical Bulletin for the years 1983- 2010.