Modeling of Nigeria’s Economic Growth Rate: A Probability Distribution Fitting Approach
Eke, Charles N. *
Department of Mathematics and Statistics, Federal Polytechnic Nekede, Owerri, Imo State, Nigeria
Osuji, George Amaeze
Department of Statistics, Nnamdi Azikiwe University, Awka, Anambra State, Nigeria
Nwosu, Dozie Felix
Department of Mathematics and Statistics, Federal Polytechnic Nekede, Owerri, Imo State, Nigeria
*Author to whom correspondence should be addressed.
Abstract
This study examined the probability distribution that best described the quarterly economic growth rate of Nigeria between 1960- 2015. The study collected secondary data from Central Bank of Nigeria (CBN) Statistical Bulletin 2015 on Gross Domestic Product to compute the economic growth rate of Nigeria. Six theoretical statistical distributions were fitted via Normal Distribution, Logistic Distribution, Laplace Distribution, Cauchy Distribution, Gumbel (Largest Extreme Value) Distribution and Generalized Logistic Distribution. The Laplace Distribution fitted the data as confirmed by Kolmogorov Simonov goodness of fit test, Akaike Information Criteria and Bayes Information Criteria. The probabilities of economic growth rate behaviours were obtained from the best fit distribution. The analysis showed that the chance of obtaining a negative quarterly economic growth rate is 28%. The chance of an economic recession is 8%. Also, the probability of having a positive single digit quarterly economic growth rate is 46%. In addition, having a double digit positive quarterly economic growth rate is 26%.
Keywords: Economic growth rate, probability distribution, statistical modeling, goodness-of-fit test