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n Journal of Emerging Trends in Economics and Management Sciences - Testing for the presence of heteroscedasticity in income, food importation and exportation in Nigeria (1976 - 2006)

Volume 3, Issue 2
  • ISSN : 2141-7024
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Abstract

The paper tests for the presence of heteroscedasticity in income, food importation and exportation in Nigeria using white heteroscedasticity and Arch Model as analytical procedure. This is done to create awareness, deepen knowledge and understanding the danger involved in given wrong forecast or prediction that may lead to greater problems in the economy. Once this is adhered to by researchers, most research conclusions will become realistic. The result of the white heteroscedasticity reveals the presence of heteroscedasticity in the analysis because the value of the critical chi-square is less than the computed or observed value of the R-squared obtained. This decision is dictated by the rule of thumb. The same situation also holds with the testing of the heteroscedasticity and specification bias. However, the error is corrected by the Arch model in which the result of the conditional heteroscedasticity reveals that the process generating the disturbance is weak. The paper, therefore, recommends that researchers should make their analysis to be heteroscedastic consistent so that their forecast or predictions will become more realistic in Nigeria.

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/content/sl_jetems/3/2/EJC132144
2012-04-01
2019-09-15

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