Application of Quantile Regression to the Role of Economic and Social Services on Citizen’s Standard of Living in Nigeria

Abstract

The role of economic and social services development on the standard of living has different effects on various class of citizens. In this study, we investigate the significant role of economic and social services development on standard of living in Nigeria using quantile regression analysis to model various quantiles of the standard of living. The dataset, which covered period of 41 years is obtained from Central Bank Statistical Bulletin. All the independent variables showed skewed distribution, and evidence of multicolinierity. Therefore, quantreg and tseries R-package were employed for the implementation of quantile regression. The quantile values considered are 0.1, 0.25, 0.5, 0.75 and 0.9. Results showed that only the compensation of employees (COE) has significant effect on the standard of living across all the quantiles distribution except the 0.25thquantile that is not significant. Also, the independent variables considered showed significant effect at 0.75thquantile. This suggests that economic and social services development only have significant effect on the higher class citizens’ living standard.