REGRESSION ANALYSIS ON SELECTED MACRO ECONOMIC INDICATOR IN NIGERIA

This project examined the effects and contribution of some economic sectors to the Gross Domestic Product (GDP) of Nigeria. The data set (in N million) covered period of 30 years from 1981 to 2010 for the following variables; Y = Gross Domestic Product, with Xi, i= 1,2,3,4 corresponding to contributions from Agricultural Sector, Building and Construction Sector, Wholesale and Retail Sector and Service Sector. The Ordinary Least Squares (OLS) technique was used to fit a model for the GDP as y = 96826.549 + 1.113x1 + 0.032x2+ 0.154x3 + 2.437x4.. The coefficient of determination (R2) shows that the four economic variables considered explained 99.7% of the variation in the nation’s GDP. The percentage contribution of each of the economy variables considered explained 99.7% of the variation in the nation’s GDP. The percentage contributions of each of the economic variables were also obtained as follow: Agricultural Sector, 46.6%; Building and Construction Sector, 1.7%; Wholesaler and Retailers sector, 18.3% and Service Sector, 20.2%.The Analysis of Variance shows that the overall regression is significant and the individual t-test of the variables x1 (Agricultural sector), x3 (Wholesaler and Retailers sector), x4 (Service Sector) have linear effect on y (Total Gross Domestic Product). That is, they all found to be statistically significant and hence, does really contribute to the variation in dependent variable (Total Gross Domestic Product). But x2 (Building and construction sector) which is not statistically significant. The simple correlation coefficient for pair of the explanatory variable was also computed. The result reveals a strong and positive relationship among the variables.