Chow Test For Structural Break: A Consideration Of Government Transition In Nigeria Form Military To Civilian Democratic Government
BIU, O. Emmanuel
Department of Mathematics and Statistics, University of Port Harcourt, Rivers State, Nigeria
NWAKUYA, T. Maureen
Department of Mathematics and Statistics, University of Port Harcourt, Rivers State, Nigeria.
Keywords: Structural Break, Pooled Regression model, Chow Test, Equality of Two Regression models
Abstract
In 1999 there was a transition of regime in Nigerian Government from the Military Government to the Civilian Democratic Government. Substantial changes were observed in the health sector amongst others, causes a significant effect in Gross Domestic Product (GDP). Using the Chow test and applying it to six different regression models namely Logarithm model, Inverse model, Quadratic model, Cubic model, Power model and Exponential model along with the Pooled Regression model. The results provided evidence from the Logarithm model, Inverse model, Quadratic model, Cubic model, Power model and Exponential model that there was a structural break in the GDP due to the switch in Government. Though all the models including the pooled regression showed significant effect of the health expenditure on the GDP, the pooled regression could not identify any structural break. This analysis was done using Minitab 21 statistical software.