A Residual-Based Cointegration and Causality Analysis of Population Growth and Real Output in Nigeria

International Journal of Research and Scientific Innovation (IJRSI) | Volume VI, Issue IV, April 2019 | ISSN 2321–2705

A Residual-Based Cointegration and Causality Analysis of Population Growth and Real Output in Nigeria

David Adugh Kuhe

Department of Mathematics/Statistics/Computer Science, Federal University of Agriculture, P.M.B. 2373, Makurdi, Benue State-Nigeria

Abstract:- This study investigates the relationship between population growth and real output in Nigeria. The study uses annual population and real GDP log transformed time series data from 1960 to 2015 and employs Augmented Dickey-Fuller and Phillips-Perron unit root tests, Pearson Moment correlation coefficient, OLS, Engle-Granger and Phillips-Ouliaris residual based cointegration tests, as well as pair-wise Granger causality test. Our results revealed that the variables under study are integrated of order one. The study found positive and significant correlation between population growth and real GDP. Population growth is also found as having positive and significant impact on real output. However, the study found no statistical evidence in support of the existence of long-run stable relationship between population growth and real GDP in Nigeria. Also, our results found no statistical evidence of the causal relationship between population growth and real GDP in Nigeria. We therefore conclude that, although population growth has significant impact on real output in Nigeria, it does not in any way Granger causes real output (real GDP) and vice versa. This result seems to be reasonable because some countries have experienced higher output and economic development even with a smaller population while others like Nigeria experienced lower output and economic growth even with a larger population.

Keywords: Population, Real Output, Correlation, Cointegration, Granger Causality, Nigeria.

I. INTRODUCTION

Population is defined as the total number of people living in a particular geographical area or region and is capable of interbreeding. Population growth refers to an increase in size of the population of a particular region or country. Population growth of a country occurs only when the total birth rate or fertility rate of that country exceeds the total death rate or mortality rate. This means that more live births occur in the country than deaths thereby making the population to go up. Population can also increase if the total number of emigrants of the country is higher than the total number of immigrants of the same country. This means that more people are entering the country which increases the overall population of the country. Population growth has many benefits as well as problems.

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