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Parental Education, Household Structure and Educational Enrolment of Poor and Non-Poor Children: Evidence From Nigeria
By Olanrewaju Olaniyan, Centre for Econometric and Allied Research (CEAR) and
Department of Economics, University of Ibadan, Ibadan, Nigeria
ABSTRACT
Education is widely argued to be critical to development process and poverty alleviation. Incidentally, low enrolment and educational wastages are serious problems in Nigeria as in many sub-Saharan African countries. This paper examines the effects of parental education and household structure on educational enrolment of children aged 6-17 years in Nigeria. The data used for this study are drawn from the 1999 Multiple Indicator Cluster Survey of Nigeria. The data covers a representative national sample of 15,580 households with a total of 74,626 persons. We employ a reduced form model of education demand derived from maximization of household utility function. The model was estimated using probits of currently enrolled children and separately for poor and non-poor families as well as separately for male and female children within each category. The paper thus provides empirical evidences on the extent of low enrolment in schools by children from poor and non-poor families and examines the determinants of each for each set of children. There is a consistent picture of the importance of parental education, household wealth and composition as factors in schooling decisions both for poor and non-poor households. Our results show that parental education matters and is important in creating benefits for their children. Mothers' education appears more important for female children than fathers' education while fathers' education appears more important for male children than mothers' education. However, mothers' educational attainment is more significant for enrolment of poor children altogether. Furthermore we found that the presence of children under the age of 6 years has negative effects on child schooling while the number of adults in the household has positive significant effects on educational enrolment of children for both the poor and the non-poor. Our results, therefore, suggest that adult education especially for uneducated mothers will have significant implications on improvement of educational access both to the poor and the non-poor.
TESTING THE PURCHASING POWER PARITY HYPOTHESIS FOR THE NIGERIAN FOREIGN
EXCHANGE MARKET
By O. Olabisi Ugbebor, Department of Mathematics , Associate Fellow, Centre for Econometric and Allied Research, University of Ibadan, and Olusanya E. Olubusoye, Department of Statistics
Fellow, Centre for Econometric and Allied Research, University of Ibadan.
ABSTRACT
The authors in their effort at modelling the Nigerian foreign exchange rate discover that so far, studies have concentrated on the official market. However, three other exchange rate markets exist. This study investigates the dynamics and behavioural operations in all the various markets. The purchasing .power parity (PPP) hypothesis was tested for each of the markets and was found to hold in the long run for all the markets. It has also been established that a valid cointegrating relationship exists between Nigerian and US prices for each market. The error correction model for each market was also confirmed to be consistent with the Engle-Granger framework. The parallel market emerges as the leading indicator of the exchange rate of the naira. This is because the level of prices in the US appears to be a determining factor of the exchange rate at IFEM and official market whereas the level of prices in both countries determine the parallel market exchange rate but neither determines the Bureau de Change rate.
MONETARY POLICY TRANSMISSION MECHANISM IN NIGERIA: A VECM APPROACH
By Rasheed Oyaromade, Research Fellow, Centre for Econometric and Allied Research, Department of Economics, University of Ibadan, Ibadan, Nigeria.
ABSTRACT
In Nigeria, the financially repressive policies that preceded the adjustment era of the late 1980s seem to have made the understanding of the channels of monetary transmission more difficult due to interest rate stickiness. This study analyses the role of bank credit and credit rationing in the monetary transmission mechanism in Nigeria.
The Granger Causality tests on the variables of the cointegrating vector autoregressive (VAR) model indicated that one-way relationships existed between bank credit and real GDP, money supply and prices and investment and real GDP with the causation running from credit to output, from money supply to real GDP and from investment to real GDP. The impulse response analysis showed that an unexpected shock to interest rate caused a significant decline in the level of real GDP and real GDP also responded significantly to bank credit innovations. The variance decomposition of the estimated cointegrating VAR model revealed that shocks to output and investment were found to be significant in explaining variability in real investment, accounting for 35 and 54 per cent respectively of one year forecast variance in investment. Shocks to investment and the price level accounted for the highest proportion in price forecast variance. Drawing from the findings of this study, it was inferred that the two broad channels of monetary transmission mechanism – the interest rate and the credit channels, played significant roles in the transmission of monetary impulse to the real sector in Nigeria.
ON THE STABILITY OF THE DEMAND FOR MONEY FUNCTION IN NIGERIA
By S. O. Olofin, Department of Economics, and Centre for Econometric and Allied Research (CEAR),University of Ibadan.Ibadan, Nigeria.Email: soolofin@hotmail.com
and D. T. Busari,Department of Economics, and Centre for Econometric and Allied Research (CEAR),University of Ibadan, Ibadan, Nigeria. Email: tdbusari@37.com
ABSTRACT
Using the cointegration\error correction approach on annual data for the period, 1970-2001, we estimated a money demand function for Nigeria and examined some stability properties. We observed that generally, the demand for real balances function in Nigeria could be described as stable over our sample period. Hence, we argued that reform measures introduced since the mid 1980s seem not to have significantly altered the demand for money function in Nigeria. The finding agrees with the proposition in the literature that if trend is taken into consideration, the money demand function is relatively stable. Such a finding implies that monetary policy in Nigeria could be effective in achieving stabilization objective since the stability of money demand function is crucial to the formulation of monetary policy.
EVIDENCE OF VARIANCE-COVARIANCE MATRIX SENSITIVITY TO CORRELATED NORMAL DEVIATES
By Olusanya E. Olubusoye, Department of Statistics, and Fellow, Centre for Econometric and Allied Research (CEAR), University of Ibadan, Ibadan, Oyo State, Nigeria.
oe.olubusoye@mail.ui.edu.ng
ABSTRACT
The design of Monte Carlo experiment to compare alternative estimators of simultaneous equation model requires an absence of correlation between the pairs of normal deviates generated. This is a very difficult requirement except several pairs of normal deviates are generated and then pairs with very low correlation coefficients are drawn. This study has designed a 2-equation simultaneous system with a specified covariance matrix and examined the correlation between the pairs of normal deviates generated and the implied covariance matrix.
The result showed that the random disturbances generated from normal deviates with feeble correlation coefficient (negative or positive) reproduced the specified variance covariance matrix while others failed. The result suggested the need to screen the normal deviates generated for the purpose of Monte-Carlo studies especially in the context of simultaneous equation systems.
STOCK MARKET PERFORMANCE AND MACROECONOMIC INDICATORS NEXUS IN NIGERIA: AN EMPIRICAL INVESTIGATION
By N. I. Nwokoma, Department of Economics, University of Lagos, Nigeria
ABSTRACT
This paper undertakes an investigation into the relationship that may exist between the Nigerian stock market and selected macroeconomic variables. The study, by investigating the existence of cointegration among these variables and employing impulse response analysis of a vector autoregressive model, attempts to establish a long-run relationship between the stock market and some of the macroeconomic indicators. From the analysis conducted, the results suggest that only industrial production and the level of interest rates, as represented by the 3-month commercial bank deposit rate appear to have a long run relationship with the stock market. In the immediate and short run, the impulse response analysis indicates that stock prices in the Nigerian market responds more to its past prices than to changes in the macroeconomic variables.
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