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A DEMAND ANALYSIS FOR CEMENT IN NIGERIA
(1970) ADEJUGBE, M. O. A.
This study was motivated by the fact that although there are several works on the supply of cement in Nigeria, the demand aspect has not been examined in detail and quantitatively. This study attempts to estimate the price and income elasticities of demand for both imported cement and for aggregate demand for cement in Nigeria. It also attempts to assess the impact of custom tariff on imported cement and appraise the import substitution effects of the domestic manufacturing of cement in Nigeria. And finally, the thesis attempts to show the trend of cement consumption in Nigeria between 1948 - 66, the annual rate of growth of consumption during this period as well as the future time path of this rate of growth. The market analysis in chapter two deals with the supply and demand determinants and the pricing policies of the firms. The market structure is also analyzed and the results of the carefully managed government foreign policy in respect of importation of cement. An appropriate model is postulated in chapter three to grapple with the problem of the demand equations. The theoretical framework is also discussed in this chapter. Chapter four is devoted to the discussion of the results of the estimated demand equations. The least squares method is used to estimate the parameters of the equations. Prom the results it is concluded that cement is price inelastic; both aggregate and imported cement exhibit low and shifting price elasticity. Aggregate demand for cement is "income" elastic. The income elasticity for imported cement is however low, this is a sign of increasing import substitution. The impact of tariff on imported cement is somewhat low when measured in terms of elasticity. The trend of cement consumption during the reference period shows that cement consumption has been growing at a decreasing rate. The rate of growth tends to about 2% with time though the level of consumption grows infinitely large with time.
A DEMAND ANALYSIS FOR CEMENT IN NIGERIA
(1970) ADEJUGBE, M. O. A.
This study was motivated by the fact that although there are several works on the supply of cement in Nigeria, the demand aspect has not been examined in detail and quantitatively. This study attempts to estimate the price and income elasticities of demand for both imported cement and for aggregate demand for cement in Nigeria. It also attempts to assess the impact of custom tariff on imported cement and appraise the import substitution effects of the domestic manufacturing of cement in Nigeria. And finally, the thesis attempts to show the trend of cement consumption in Nigeria between 1948 - 66, the annual rate of growth of consumption during this period as well as the future time path of this rate of growth. The market analysis in chapter two deals with the supply and demand determinants and the pricing policies of the firms. The market structure is also analyzed and the results of the carefully managed government foreign policy in respect of importation of cement. An appropriate model is postulated in chapter three to grapple with the problem of the demand equations. The theoretical framework is also discussed in this chapter. Chapter four is devoted to the discussion of the results of the estimated demand equations. The least squares method is used to estimate the parameters of the equations. Prom the results it is concluded that cement is price inelastic; both aggregate and imported cement exhibit low and shifting price elasticity. Aggregate demand for cement is "income" elastic. The income elasticity for imported cement is however low, this is a sign of increasing import substitution. The impact of tariff on imported cement is somewhat low when measured in terms of elasticity. The trend of cement consumption during the reference period shows that cement consumption has been growing at a decreasing rate. The rate of growth tends to about 2% with time though the level of consumption grows infinitely large with time.
EXCISE TAXATION IN NIGERIA
(1970) ADEWUMI, M. O.
AN ECONOMETRIC STUDY OF EXPENDITURE PATTERNS OF CONSUMERS IN SELECTED URBAN AREAS OF NIGERIA
(1972-02) ADAMU, S. O.
Optimum utilization of available statistical data is an objective which a country, particularly a developing one, should pursue. Adequate information about the structure of an economy is necessary for purposeful and meaningful planning, but a developing country lacks long statistical series that can make such information available. The objective of this study is to construct a simultaneous equation model of expenditure patterns of consumers based on the theory of consumer’s behavior; estimate parameters of the model; examine statistically various other factors, in addition to income, which affect consumption; and subsequently, with the help of certain assumptions on consumer preference orderings, derive income and price elasticities using Nigerian family budget data. The achievement of this objective depends on sound theoretical basis and appropriate data. These are covered in chapters 2, 3 and 4. The findings are discussed in chapters 5 and 6. These findings show: that different levels of factors like area and occupation affect average group expenditures (test between means) but the slopes of group expenditures with respect to total expenditures (the B’s) are not significantly affected by these factors; that areas effects are reasonably explained by occupational composition of areas; that the way estimates of B vary with family size confirms common indication of economics of scale particularly for commodities like food and transport: that because of broad classification of commodities, family composition cannot be meaningfully incorporated into the analysis: that two-way classification by income and family size is superior to one-way classification by income alone and; that with the aid of the leser-Frisch approach to assumptions concerning substitutability or complementarity between broadly classified commoditites, some kind of estimates of price elasticities is possible in addition to the usual income elasticities from family budget data.
THE DEMAND FOR CIGARETTES IN NIGERIA, 1950 - 1971; AN ECONOMETRIC STUDY
(1973) ADIKIBI, O. T.
Cigarette, besides being an important source of Excise tax revenue to many countries, has interesting theoretical implications mainly because of the very peculiar consumer needs it satisfies and because it has no exact direct substitute, except substitution among the different brands that exist. Over the years, the consumption of cigarettes in Nigeria has increased remarkably despite all the medical, social and religious campaigns against smoking. This study attempts at explaining the observed variations in the National consumption of cigarettes within the period 1950-71 as influenced by some variables, the strength of which the study tries to measure by applying econometric methods. The variables considered are economic and demographic factors; the economic factors include income and prices while the demographic variable is changes in the proportion of smokers in the population. The study therefore estimates the elasticities of demand for cigarette with respect to income, average price of cigarettes, price index of all other commodities and the demographic factor. The single equation model is adopted to analyse idle annual time- series used in the study. National aggregates as well as per capita data formulations were tested. For the dependent variable (i.e. quantity of cigarettes consumed) aggregation logically means the assumption that cigarettes are homogeneous. The function adopted is non-linear in the original data but linearized in logarithms, the parameters of which were derived by least squares. Besides these other variables, a war-year dummy was introduced in the function to take care of "erractic factors" which affected the consumption of cigarettes during the Nigerian civil-war period, 1967-70. The analysis was carried out on two levels; the static and the dynamic approaches. While in the former the current value of the independent variables influenced the current value of the dependent variable, in the latter, a lagged variable (the quantity variable was lagged) was introduced into the function explicitly. The latter analysis - i.e. the dynamic approach - was applied to test the habit- persistence hypothesis. The results obtained in the study are: (a) the elasticities of demand with respect to income and an average of cigarette prices are low though the income elasticity is comparatively higher. In both cases none was up to 0.7. The price elasticity was particularly low, it was under 0.4. (b) the cross elasticity of demand 'with respect to the price of all other commodities v/as positive and nearer 2 than 1. In other words, it was far greater than unity and thus tends to indicate that consumers were more sensitive to changes in the prices of other commodities than to cigarette prices. (c) 'population', perhaps the changes in the proportion of smokers to non-smokers or the extension of the smoking habit to -the women and members of the lower age group, is a significant factor accounting partly for variations in the National consumption of cigarettes. (d) the habit-persistence hypothesis was supported by the results of this study, that is, the more a person ha3 consumed cigarettes in the past, the more he will consume currently. The estimated "coefficient of adjustment' was about 0.86 which indicates a speedy adjustment of consumption to changes in prices and income. (e) the dummy variable shows positive sign which shows that the National consumption of cigarettes increased during the civil-war despite the temporary loss of the Eastern market. It was suggested from the above result that during major political upheavals the consumption of cigarettes will increase ceteris-paribus. This increase might have been due partly, to the high tension and depressive mood that engulfed the country and, of course, the military consumption. In conclusion, the economic and policy implications of the results were discussed. To the Government, cigarette is one of the products to tax to raise revenue. To the firms engaged in the Tobacco Industry, it might be profitable to pursue a relatively stable retail price policy in view of the high sensitivity of consumers to changes in the prices of other commodities.
AN APPLICATION OF GOAL PROGRAMMING TO ACADEMIC RESOURCE ALLOCATION PLANNING
(1982-12) SOYIBO, A.
Since the last decade, universities in Nigeria have been experiencing a progressive decline in required inputs, like funds, materials and academic staff. In spite of this, there has been a continuing rise in the demand for their services, as shown by rising student enrolment figures (Nigeria, 1981). Confronted with such a problem, universities require more than ever before, formal decision models for planning the allocation of their scarce resources as efficiently as possible. This study applies goal programming for planning the academic resource allocation--a major input--of the University of Ibadan for 1982/83-l986/87. The goal programming model used modifies that of Schroeder (1974) by defining explicitly a student enrolment goal and introducing an academic staff level goal, which is designed to cater for academic staff advancement, at least according to the historical rate in each faculty. Furthermore, it redefines the academic rank distribution goal to incorporate the controversial 30%-40%-30% rank distribution ratios introduced in 1981. The study seeks principally to determine the distribution of academic staff by rank, in each faculty/college, over a five-year period and recommend the planning implications of such a distribution. In addition, it attempts to find the effects of dropping the controversial rank distribution goal on the model solution. The model was solved using the Revised Simplex Goal Programming Algorithm developed by Kang (l980) on an I.B.M. VM 370 computer in the University of Nebraska-Lincoln, U.S.A. The analysis of the model solution: suggests that from a purely theoretical point of view, it is desirable to use a rank distribution goal, for an optimization model of the type used in the study; otherwise, the model will select least cost allocation alternatives only and such a solution cannot be used effectively for planning. However, the distributional ratios to be used should not be rigid like the controversial ones of 1981, but should reflect the historical advancement rates in the respective faculties. The result of solving such a model should be, used for indicative planning only; -confirms the fear that the use of fixed rank distribution ratios might inhibit promotion rate; -indicates that the Faculty of Agriculture and Forestry appears to be operating very much below the minimum level of academic staff requirement to meet the student enrolment goal of that faculty as of now; -suggests that by the beginning of 1986/87, the University of Ibadan will require a minimum of 1,133 academic staff of various ranks to meet its student enrolment goal. This is over 60% above the minimum requirement at the beginning of 1982/83; -recommends that the University should pursue a vigorous Staff Development Programme in which the training of the best of its graduates--through a type of Junior Fellowship Programme--will be the core, as one approach of augmenting the supply of academic staff normally obtained through recruitment; -corroborates the findings of Kang (1980) that CPU time of the Revised Simplex Goal Programming Algorithm, tends to increase with increasing negative deviational variables in the objective function.
EXCHANGE RATE REGIMES AND ECONOMIC PERFORMANCE: A COMPARATIVE ANALYSIS
(1993) ADEGBITE, E. O.
In 1973 the industrial countries of the world abandoned the Bretton – Wood adjustable - peg exchange rate system as a means of international payments, and embraced a floating exchange rate system. By the beginning of the 1980's some developing countries of the world joined the league of exchange rate-floaters. It was thought that a floating exchange rate system is intrinsically superior to a fixed one because it not only insulates an economy from the events in other economies but also provides automatic adjustment of the trade balance and the balance of payments. From the mid 1980's however there have been calls in the industrial countries for yet a change in the international payments system from a floating one back to the Bretton-Woods fixed system (Marris, 1984; Dunn, 1983) or to some other variant of a fixed system. The questions then are - is there an ideal exchange rate regime? - is there reason to believe that a given exchange rate regime enhances the performance of an economy better than another? These questions form the focus of this study. There have been several positions in the literature. While Mundell-Fleming (1960, 1962) maintain that a floating exchange system is better than a fixed one if a country tends to depend more on monetary policy, but that a fixed exchange rate regime is ideal when fiscal policy is the major instrument employed in an economy, Sohmen (1965) maintained that a floating regime is superior whatever the more dominant economic policy (fiscal or monetary). Demberg (1970) maintained that the performance of an economy does not depend on the exchange rate regime per-se but rather on the optimal mix of fiscal and monetary policy. In the developing world there is fear that a floating exchange regime would aggravate rather than reduce the problems of inflation. debt-service burden and balance of payments disequilibrium (Olofin, Akinkugbe, Ajayi 1986). This study therefore attempted to find out which of the positions in the literature really holds in the case of developing African economies. To find answers to the issues raised we chose three African economies who had experienced both fixed and floating exchange rate systems, Namely, Ghana. Nigeria and Uganda. We built a model of each economy in the manner of Rhomberg (1964) and Tullio 1981. Each model has two versions. The shorter version has seven stochastic equations and tries to capture the economy under a fixed system, while the longer version added two additional stochastic equations to the first set and endogenizes exchange rates and interest rates as obtains under a floating exchange system. Utilizing quarterly data for 1977 to 1990 for Nigeria and Ghana, and for 1981 to 1990 for Uganda and employing the Ordinary Least Squares technique we estimated the shorter version of the model for the period 1977:1- 1990:4 and the longer version for the period 1986:4-1990:4 for Ghana and Nigeria. In the case of Uganda we estimated the longer version for the period 1981:1 to 1990:4 and the shorter version for 1987:2 to 1990:4. Beyond the statistical tests of the individual equations and parameters, we attempted to carry out rigorous tests of the validity of our model(s) through dynamic simulation. Thus we solved our model(s) using the Time Series Processor (TSP) econometric Software (Version 4.0) developed by Hall in 1983. When we solved each model using the Gauss -Seidel iterative technique, each converged for each endogenous variable and for each year demonstrating that each model is internally consistent. Utilizing different policy scenarios we tried to find out the effects of monetary, fiscal and exchange rate policy changes on internal sectors' macroaggregates of prices, real demand for money and money supply, as well as on external sector's macroaggregates of exports, imports and the trade balance. The results of our estimation exercises reveal that in Ghana a floating exchange rate system does not fuel inflation as is suggested by casual empiricism; rather it is the money supply that is the major propeller of domestic prices, given an exchange rate elasticity of domestic prices of 2% which is statistically insignificant at the 5% level and a money supply elasticity of domestic prices of 19% that is statistically significant at the 5% level. In Uganda there is a remarkable pass through from nominal exchange rates onto prices which contradicts Elbadawi's (1990) position, that it is not nominal exchange rates that fuel inflation in Uganda but fiscal deficits. The exchange rate elasticity of domestic prices in Uganda is 11% and this is statistically significant at the 5% level. However even in Uganda, nominal money supply and nominal rates of interest proved to be greater propellers of prices hence they have more dominant impact on inflation than the nominal exchange rate. In Nigeria there is some degree of pass through from nominal exchange rates onto prices given an exchange rate elasticity of domestic prices of 5%, which is statistically significant at the 5% level. However as in Ghana and Uganda money supply was the greater propeller of prices in Nigeria. What is more- the estimation results also showed that nominal exchange rates in the three countries follow the money supply. This goes to show that the behavior of the money supply and hence monetary policy influences the direction and degree of variability in nominal exchange rates under a floating system. Hence it shows that monetary policy is crucial to the success of the floating exchange rate system. Further the money supply was shown to vary in response to government fiscal deficits which makes fiscal prudence or otherwise the major determinant of exchange rate movements. For the simulation experiments we tried to find in what ways our endogenous variables change if a given macroeconomic policy varies while the others are kept constant. Thus we increased the rate of growth of government expenditure while keeping monetary policy and exchange rate policy constant. Similarly when we increased the rate of growth of the money supply we assumed fiscal and exchange rate policies to be constant. Our results show that in the long-run (over a period of at least ten years) a floating exchange rate performs better than a fixed one in terms of ensuring expanded output which ensures declining prices which in turn results in rising real demand for money and hence in rising rates of interests. A floating exchange rate regime also expanded exports and higher positive trade balance. Overall however the success of the floating system depends on coordinated and prudent macroeconomic policies; in the words of Goldstein (1984) "the capacity of the exchange rate system per-se to do good or harm should not be overestimated... the importance of discipline and coordinated macroeconomic policies for the successful operation of floating exchange rate regime should not be underestimated".
FINANCING OF BUDGET DEFICITS AND INFLATION IN NIGERIA, 1966-85
(1995-07) ABDULLAHI, S. H.
In a federal system of government, it may not be sufficient to study the inflationary effect of government reliance on money creation as a major means of financing expenditure. This is particularly so as some level of government besides the central authority may finance its deficit without recourse to money creation but in ways that may ultimately augment the money supply. There is therefore the imperative need to study the interaction between budget deficits and inflation in the Nigerian economy taking into account the various financing options. The stock of money is considered to be affected by the net claims of the central bank and commercial banks on the government. The public finance approach to inflation with its emphasis on the government budget constraint provides the analytical framework on which a monetarist model of inflation is formulated. The model is estimated using annual data for the period 1966-85. Equations are specified to explain price determination, money supply, high-powered money, government net indebtedness to the banking system, revenue, and expenditure. Besides, identities relating to formation of expectations about inflation and the budget constraint are set out. Since the constructed model was over-identified based on the rank and order conditions for identification, the two-stage least sguares technique was used in the estimation. The empirical results show that government borrowing from the central bank as well as the banking system serve to expand the money supply and exert upward pressure on the price level. However, a given percentage increase in the debt holdings of the central bank greatly affects the money supply and price level more than an equivalent percentage increase in the net claims of commercial banks on the government. Debt holdings by the nonbank public was found to have similar macro- economic effects as private wealth. However, because the positive effect on aggregate demand through this financing source is through a channel different from money supply and more importantly its relative insignificance, this phenomenon generally known as "Wealth-Savings Relation" was not incorporated in the analytical model.
Import competition and Nigeria’s manufacturing sector: analysis of the employment effects of trade
(African Journals Online, 1999-06) Bankole, A. S.; Lawanson, O. A.; Aminu, A.
Impact of manufactured goods’ exports on economic growth: a dynamic econometric model for Nigeria
(African Journals Online, 2004-12) Lawanson, O. T.; Lawanson, A. O.; Bankole, A. S.
The impact of exports on growth has for a long time enmeshed in controversy partly due to both positive and negative effects empirically established in the literature. Still, most studies in developing countries have left detailed examination of exports' components and domestic institutions unexplored in the export-growth nexus. Based on an error correction model, this paper examines the impact of manufactured exports and its components on economic growth in Nigeria, taking cognisance of the country’s institutional framework. Few of the components of manufactured exports were found to exert positive influence on growth both in the long and short runs. The paper, however, finds ample evidence in support of the relevance of quality of institutions in the economic growth process. In effect, with the right institutional framework, export-led growth, , and specific focus on selected manufacturing subsectors there appears to be a feasible development strategy for Nigeria.
National health accounts: structure, trends and sustainability of health expenditure in Nigeria
(African Journals Online, 2007) Soyibo, A.; Olaniyan, O.; Lawanson, A. O.
This paper explored the structure of the contribution of different stakeholders to the financing of health care in Nigeria. The analysis was based on the National Health Accounts (NHA) 1998 to 2002 estimates for Nigeria. The main objective was to assess the viability of each stakeholder as a sustainable means of financing health provision in Nigeria. About two-thirds of health expenditure in Nigeria was directly financed by households, while public sector funding was less than half the amount committed by households. Third-party payment through health insurance represented a minuscule portion. A comparative analysis of the trend in the sources of income of households and revenue of government, revealed a wide disparity that suggested possible non-sustainability of their respective roles in health financing in Nigeria. Apart from the fact that the contributions of NGOs’ were very small, they were dependent on donor funds whose vagaries can significantly affect sustainability. Though, health insurance contributed minimally to health financing in Nigeria, its prospect in assuming a significant role appeared to be very bright. The progressive growth of health insurance contributions was an indication of the prospect of the recently introduced National Health Insurance Scheme (NHIS) in Nigeria. The NHIS represents a viable means of pooling resources in such a way that the burden of both the government and the households can be greatly relieved. Thus, the sustainability of financing health care in Nigeria may strongly depend on the extent to which the populace was covered by the health insurance plan.
Cost-effectiveness analysis of mectizan treatment programme for onchocerciasis control: operational experiences in two district of Southern Nigeria
(Dept. of Physiology, College of Medicine of the University of Lagos, Lagos, 2009) Osungbade, K. O.; Olumide, E. A. A.; Lawanson, A. O.; Asuzu, M. C.
Objectives: This study analyze the operational costs of two Mectizan treatment strategies in relation to their effectiveness. Methods: The study was conducted in 24 communities located in Irewole and Egbeda districts of Osun and Oyo State, Nigeria respectively. Cost-effectiveness analysis included retrospective analysis of cost of treatment, review of records of distributors, estimation of overall cost-effectiveness ratio of treatment and distribution, calculation of mean cost-effectiveness ratios and statistical comparison of the mean cost-effectiveness ratios. Results: Overall cost of treatment per person through mobile distribution was N27.39 (USD1.16) while the corresponding overall cost through community-directed distribution was N14.35 (USD0.61). Overall cost of distribution per tablet through mobile distribution was N20.97 (USD0.89) while the corresponding overall cost through community-directed distribution was N8.39 (USD0.36). The difference between the mean cost-effectiveness ratios for treatments through mobile distribution, 56.79, and community directed distribution, 32,53, was not statistically significant (p=0.120265). Similarly, the difference between the mean cost-effectiveness ratios for distribution of tablets through mobile distribution, 40.83, and community-directed distribution, 19.17, was not statistically significant (p=0.167249). Treatment coverages were 59% and 80%, and 2,376 and 4,148 tablets were respectlveIy distributed, Conclusion: Distribution of Mectizan tablets by community-directed distributors was more cost-effective than by mobile health staff, but the differences in cost ere not statistically significant. However, this could ensure self-reIiance and sustainability of treatment programmes, which are prerequisites for decision making on treatment strategies.
National health accounts of Nigeria: results from second rounds of estimation
(2010-09) Lawanson, A. O.; Olaniyan, O.; Soyibo, A.
Nigeria Health Accounts (NHA) tracks the flows of health spending from financial sources to end users. This paper uses the framework to capture the general health expenditure and updates the earlier NHA for Nigeria by providing estimates for 2003-2005. The estimates were prepared in line with the WHO’s guide to the NHA estimation. Our estimates reveal that households are the major source of health funds in Nigeria. Government funding accounts for a quarter of the health funds and but the main incidence still lies with households. These funds were spent about equally in private and public health facilities. Although resource pooling is not widespread, health insurance show promise as a significant potential option in health care financing. Given health as a public good, the implication is that there is need for government focus on the responsibility to lessening the burden of health expenditure on poor households if its stewardship role is not to be called to question.
The structure of generational public transfer flows in Nigeria
(Edward Elgar Publishing Limited, Cheltenham, UK, 2011) Soyibo, A.; Olaniyan, O.; Lawanson, A. O.
Consumption and income over the lifecycle in Nigeria
(Union for African Population Studies, 2011-04) Olaniyan, O.; Soyibo, A.; Lawanson, A. O.
This paper utilises National Transfer Accounts framework to estimate age profiles of consumption and income over the lifecycle in order to determine actual period of dependency in Nigeria. The paper quantifies inter-age monetary flows of consumption and labour income and subsequent economic lifecycle deficit and the implications this will have for social policy and human capital development. The results indicate that given the profiles of consumption and income over the lifecycle in Nigeria, child dependency is for the first 33 years of life while old-age dependency occurs from 63 years upwards. The period of lifecycle surplus span 30 years from 33-63 years. The structure of consumption and income flows reveals that Nigeria has a lifecycle deficit of N3.5 trillion in 2004. Since the population is highly skewed towards children, inter-generational flows are heavily skewed downwards. The deficits must then be covered through age reallocations of transfers and asset income.
DETERMINANTS OF RESIDENTIAL HOUSING CHOICE IN LAGOS STATE, NIGERIA
(2011-09) AJIDE, K. B.
The developing world is changing from one of rural villages to that of urban dwellings. The population of Lagos, which stood at 270,000 in 1952/53, rose to 5.69 million in 1991 and was estimated to be 18 million in 2010. This has created excessive demand for housing. Available statistics on housing production showed that between 1974 and 1989, 11422 units of houses were produced. This number fell precipitously to 8162 units between 1994 and 2004. The estimated housing deficit for Lagos in 2010 was 5 million representing 28% of the estimated national housing deficit. The gap between housing delivery and housing demand, engendered by population growth, has necessitated competition and choice making from the available housing alternatives. The literature hardly takes adequate account of the economic and related factors influencing residential housing choice decisions in Third World cities. This study, therefore, investigated the socio-economic determinants of residential housing choice in Lagos, Nigeria. A multinomial logit model, based on the neoclassical consumption framework augmented by hedonic pricing approach, was used to determine the socio-economic determinants of residential housing choice. The specific variables considered were household income, housing price, household size, marital status, ethnicity, gender, and age. The model allowed for the classification of housing units as single-household, multi-household houses, a flat in a block of flats, duplexes, a room in the main building and squatters’ settlements, across high, medium and low density areas. It also has the advantage of comparing the various residential housing choices with the base category (multi-household houses). Cross-sectional data from 4,433 randomly selected rented dwellings across the 20 local government areas in Lagos were used. Diagnostic tests, the variance inflation factor and Box-Cox transformation were used to correct for multicollinearity and functional specification problems. Household income, housing price, household size, marital status and age were the main determinants of the residential housing choice of households. The effects of gender and ethnic variables were not statistically significant. Household income would increase preferences and probabilities for flats, duplexes and single household houses by 7.24, 4.87 and 3.23 times respectively over multi-household houses. The probabilities, however, decreased by 0.02 and 0.85 times for squatters’ settlements and a room in the main building relative to multi-household houses. Households preferences would increase for flats and duplexes by 4.58 and 3.50 times relative to multi-household houses when there is an increase in housing price. The probabilities for squatters’ settlements and a room in the main building are likely to fall by 0.33 and 0.47 times respectively relative to the base category. All these results were statistically significant at the 5.00% level. Other factors such as household size, marital status and age were also statistically significant at the 10.00% level across different residential density areas. Household income and housing price stood out prominently as the major determinants of residential housing choice in Lagos. Economic factors were more important than demographic variables across different residential density areas. Meeting residential needs would require policies aimed at improving incomes and setting appropriate housing prices.
TRANSMISSION MECHANISM OF MONETARY POLICY IN NIGERIA
(2011-11) OREKOYA, S. O.
The Central Bank of Nigeria (CBN) has pursued among other goals, low and stable domestic price level and output growth using various monetary policy instruments. Despite these efforts, output growth rate averaged 1.32% between 1980 and 1989 and 2.87% between 1990 and 1999. Also, the monetary authority’s inflation rate target of 5.00% in 1992 and 31.00% in 1995 escalated to 44.59% and 72.81% respectively. There has been limited attempt to investigate the channels through which monetary policy affects output and prices in Nigeria. This study, therefore, empirically investigated monetary policy transmission mechanism and sought to establish the relative effectiveness of various monetary policy instruments in Nigeria. A Monetary Transmission Mechanism (MTM), predicated on Mishkin framework, that captures the impact of monetary policy in an economy was employed. The MTM focused on bank lending, exchange rate and interest rate channels, evident in most developing economies like Nigeria. A Structural Vector Autoregressive (SVAR) model, based on monetary policy transmission dynamics which identified the magnitude and impact of structural shocks, was developed to test the importance of these channels. Generic, composite and separate models including the impulse responses of the channels were estimated. Variance decomposition was also conducted to determine the magnitude of fluctuation attributable to different shocks. With quarterly data from 1970 to 2008, the time series properties of the models’ variables were ascertained using the Augmented Dickey-Fuller and Phillips-Perron tests. The effectiveness of Reserve Money (RM) as a monetary policy instrument over Interest Rate (IR) was evident as a marginal increase of 0.15% in RM precipitated increased output and prices declined by 0.20% and 0.60% respectively. The weakness of IR as a policy instrument was shown with an increase of 2.02% in IR yielding no significant response from output and prices. Bank lending declined from 0.89% in the first quarter to 0.23% below the baseline in the second quarter following a marginal increase of 0.05% in RM. Output declined consequently below the baseline by 0.12% and 0.15% while prices rose by 0.15% and 0.10% in the second and third quarters respectively. By implication, the weak response of exchange rate to similar increases in IR of 2.02% and RM of 0.15% suggested that this channel did not capture MTM in Nigeria. Also, output and prices’ non-response to increase in IR of 2.02% and RM of 0.15% suggested that interest rate channel was weak. Bank lending channel remained the existing MTM in Nigeria, while the impact of monetary policy shock on output and prices occurred only after a time-lag of six years. Reserve Money was a potent policy instrument with output responding more to policy variations than prices. Bank lending remained a significant channel for propagating policies to target variables. The CBN should therefore focus more on the use of RM as a policy instrument rather than a hybrid of RM and IR. There should also be emphasis on price level stability since this has the tendency of fostering output growth.
Introduction and overview
(Ibadan University Press, Publishing House, University of Ibadan, Ibadan, 2012) Olaniyan, O. A.; Lawanson, A. O.
Public sector healthcare financing and health outcomes in Sub-Saharan African countries
(Ibadan University Press, Publishing House, University of Ibadan, Ibadan, 2012) Lawanson, A. O.
Introduction and overview
(Ibadan University Press, Publishing House, University of Ibadan, Ibadan, 2012) Olaniyan, O.; Lawanson, A. O.