Statistical Analysis of Nigeria’s Price Sector: An Econometric Approach

Abstract

This study analyzed Nigeria’s price sector using a formulated model for the price sector of the Nigeria economy. A set of simultaneous equations were used to reflect the implicit gross domestic product deflators for each of the sectors of the Nigeria economy and was found to be over identified under the order condition for identification. The model was estimated by ordinary least square method and two stage least square methods. All the variables have expected signs and as indicated by the F –statistic, the overall performance of the entire regression is significant.  The high measure of R2 and Ṝ2, in each case indicates that the explanatory variables included in the equation jointly account for the entire variation. The small RMSE also indicates that the equations have good fit. Durbin –Watson statistics shows that there is no positive first order autocorrelation. The small value of the Theil’s inequality indicates that the equation has good predictive performance. The researcher therefore recommends that government should employ the model so as to be able to monitor price of each of the sectors of the economy and put proper mechanism in place to control those sectors that affect the overall price sector of the economy.