Regression Analysis On National Income
Chapter One
Preface
public income is the sum of the plutocrat value of all the goods and services produced in a country within a particular period of time generally one time.
The question of how an frugality grows could come to mind at this juncture. It the quantum of goods and services produced by an frugalityincreases.However, it isn’t growing, indeed if it’s growing, If it doesn’t increase yearly. thus it may not be possible to determine the condition of the frugality.
In any case, an frugality needs an index for measuring frugality growth, this index is the financial totality at all the goods and service produced in an frugality within a particular period of time generally a time.
To get public income of a country like Nigeria for case, we take the list of the goods and services produced in the country during the time, assign values to them and addup.However, we shall be suitable to make comparison of conditioning of Nigeria time after time, If we can do this time after time. also we can decisively determine whether the frugality of Nigeria is growing, declining or stagnant. It’s growing if the public income increases time after time, declining, if the public income is dwindling and stagnant it there’s no difference in the National Income for times.
In measuring National Income, an index called Gross Domestic Product( GDP) is used at current price. It’s thus relatively important then to point out the part that prices could play in the dimension of National Income. Prices of goods and services changes from time to time. These changes can affect any tried estimates. vastly. thus to get an idea of the real physical change in National Income from time to time, effect of price changes must be removed.
National Income should be measured in real terms and allow for changes in price situations. For case whenever the frugality gests affectation, price rises while the amounts of goods and services may remain constant. Let us say that 2000, the total units of the go0ods and services realized in Nigeria amounted to 50,000 units and also 50,000 units in 2001. Let us further assume that the average per unit in 2000 was N10.00 while the price in 2001 was N 15,000.
Nigeria’s income with GDP as an index for 2000 was 50,000 units X N10.00 = N 5000,000 Nigeria’s income with GDP as an index for 2001 was 50,000 units X N15.00 = N 750,000.
still, he’d be tempted to say that the public income for 2001 was advanced than that of 2000, If the two numbers were presented to a nonprofessional as final products of overall estimates for 2000 and 2001. This is so monetarily but really the income for both time are equal. The difference in value was due to rise in p rice in 2001 while the amounts of goods and services were the same in both times.
The same thing can be applicable when a country experience deflation or depression. thus in measuring public income for different times using gross domestic product as an index goods of price changes must be given the normal due. In so doing the changes in frugality can be determined meetly.
Statement Of Problem/ Provocation
As a result of poor profitable condition in Nigeria applicable information is of great interest to me for disquisition if feasible profitable result can be revealed.
Nigeria considered as one of the third world countries is been assessed by their income yearly. It’s a simple sense of our living that it country’s income is high with considerable population, the enjoyment of the citizens of that country would be high, while the enjoyment is low with low public income. It’s on this point that I find it veritably advisable to dissect the public income of Nigeria and make necessary recommendation for the enhancement of the frugality for the betterment of the populace.
Aims And Objects
In view of Nigeria’s profitable dilemma, the design is aimed at probing the relationship being between disposable income, savings and government final expenditure for the purpose of suggesting results to our profitable problems.
After the retrogression analysis had been carried out, it’ll supply result to the following questions
1. Is any direct relationship between the variables listed?
2. How dependable is our retrogression measure?
3. Can we prognosticate the unborn value of dependent variable?
4. How dependable will be our estimate?
Compass Of The Study
The study is centre on “ National Income, Savings and Government Final Consumption Expenditure Covering the period of six times 1998 – 2003.
The raw data used are collected as primary data by civil office of statistics ” publication and Federal Ministry of Finance Publication. The data are collected as primary data by civil office of statistics and used as secondary data in this design which centered on public Accounts. Some of these National Accounts summations Include Gross Domestic Product( GDP) final consumption expenditure, exports and significances.
National Accounts data presents the record of profitable sale of the profitable in a methodical manner and show the relationship between the colorful factors of the frugality. profitable sale cover all the conditioning of an reality( Household, government, establishment, fiscal institution) that are of profitable nature( product, consumption distribution, savings and foreign exchange deals. These profitable deals of all the entiti8tes and combined together announcement presented inform of account.
Data collected for analysis in this study center on-
1. Appropriation of disposable income as dependent variable.
2. Savings as one of the independent variable
3. Government final consumption expenditure as another independent variable.
Significance Of The Study
The study will help to know the status of Nigeria frugality. The knowledge of the status will help to make necessary recommendation in order to revitalize the poor profitable condition of the country for the better future.
The study will also produce avenue for unborn exploration.
Description Of Generalities
Gross Domestic Product( GDP) This is the sum of the plutocrat value of all locally produced goods and services. It doesn’t include transnational sale. GDP doesn’t make allowance for deprecation of capital.
Gross National Product( GNP) This is the total plutocrat value of current request prices of all final goods and services produced by the citizens during a specific period. It includes net income from abroad in respect of the country’s citizens without any consideration for deprecation of capital.
National Domestic Product( NDP) This is the total value of all goods and services produced in a country in a period of time. It count the value of the net earnings and inflows from abroad. An allowance being made for deprecation of capital.
Net National Product( NNP) This is the financial value of all goods and services produced within the country during a specific period. It includes net inflows and earning from abroad and provision being made for the relief of deprecation of capital.
Disposable Income( DPI) This is the quantum of plutocrat per time that private sector are free to spend when deprecation of capital, all levies, all net gains made by enterprises but not paid out as divided are added to the disposable and transfer payment abated. We arrive at gross public product.
Net Economic Welfare( NEW) This examines those factors not considered when calculating the Gross National Product( GNP). similar factors include social cost 9pollution) and rest time the net profitable weal tend to remove the product( GNP). A nation might have a veritably high GNP at a veritably great social cost as pollution, rising crimeetc.
Per Capita Income( PCI) This is the gross domestic product divided by the population of the country. Per capita income can be calculated once the population and gross domestic product are known. So thatP.C.I = GDP
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