The quest for economic good life for the citizen of the world have being at the centre of the policies of world leading organizations like the World Bank, United Nations and other regional organizations in different parts of the world. But in spite of their entire efforts put together poverty incidence is yet to be fully abated in many regions and communities all across the globe.

Today several indices are being used to measure the improvement in people’s welfare. In the study of economics, the GDP is often be been used as an indicator of progress, and it is also taken as a means of measuring of economic progress, prosperity and at the same time well-being. As posited by Michaelson et al. modern state is organized by designing a model of development that says increased economic output directly improves the well-being, stimulates higher standards of living and an improved quality of life. Somehow, evidences through monitoring over time have shown that increasing tendency of economic output as measured by the GDP has proven not to be sufficient method of measuring economic progress as witnessed by the recent big global financial challenge and crisis. 

It is in the wake of this that Maxton provocatively in the face of recent economic ideas, experience and behaviour in the last few decades demands for a rethinking of the concept of economic progress in line with present realities. He pointed out that in the last few hundred years, business and economics have not faced real progress at all because the way and manner progress is being measured especially that it requires objective and not subjective indicators. According to Stevenson and Wolfers [1] society in modern times is obsessed with the quest for growth that is viewed on the basis economic wealth increase. For example, rising economic growth and output in the economy are often quantified in monetary terms and in relation to the GDP. It is such that the GDP is erroneously being frequently used for welfare analyses and as indicator for measuring standard of living. However, emerging trends is not agreeing with this assertion that GDP growth should lead better economic and there has been agreement in favour of this position. As observed by Aghion and Howitt [2] a group of economists have put forward that growth is the finest way to achieve massive poverty reduction. That is, economic growth and progresss often come with job creation opportunities for the unemployed and the poor thereby assisting in a stable economic well-being for the people.

The Nigerian economic capacity as reflected in the recently rebased GDP shows that the nation is on the pathway to emerging as an economic giant in the world in not too distant time and this as a matter of fact cannot be played down; because the nation’s economy currently ranked as one of the largest in Africa. The challenge has been why is it difficult for this rapid economic growth to be transformed into better living standard and economic well-being for the people? This is part of the concern of this study.

Statement of the Problem

The Gross Domestic Product (GDP) according to Onuoha, Ibe, Njoku and Onuoha [3] is one of the primary indicators used to measure the healthiness of a country’s economy. It is also used to determine the standard of living of individuals in an economy. Ordinarily, when there is a rise in the GDP growth, it is often presumed that it is accompanied by rising economic activities leading to creation of more job opportunities for a better economic well-being for the newly employed. Ivkovic put forward that it is satisfactory to use economic growth and increased output in the economy as quantified in monetary terms and as captured in the GDP as an indicator of economic welfare and progress. 

In the meantime, Olu posited that it is a misnomer to have rising unemployment rates in the face of a growing economy. Likewise, in line with economic theory, economic growth should naturally give rise to job creation leading to employment opportunities for a better economic well-being as well. Economic growth in the form of rising GDP has long been considered an important goal of economic policy, yet in recent years some have begun to argue against further trying to raise the material standard of living, claiming that such increases will do little to raise well-being and that if economic growth does little to improve social welfare, then it should not be a primary goal of government policy [1].

In Nigeria, until recently that there was a slide into recession, the nation’s GDP has been experiencing consistent rise. In addition, to be declared out of recession implies that the economy is on the rise again. But the concern of this work is; what is the nature of relationship between rising GDP growth rate and the economic well-being of the people in Nigeria? And secondly, what has been the impact of GDP growth on the economic well-being of the citizen of Nigeria.

Research Questions

The following questions shall guide this study:

• What is the nature of trends between Gross Domestic Product (GDP) growth and Economic Well-being of people living in Nigeria between 2005 and 2016

• To what extent has Gross Domestic Product (GDP) growth impacted on the Economic Well-being of citizens of Nigeria

Objectives of the Study

The main study objective is to examine the analysis of trends between Gross Domestic Product (GDP) growth and Economic Well-being in Nigeria (2005 - 2016); while specifically, the study seeks to find out: 

• The nature of trends between Gross Domestic Product (GDP) growth and Economic Well-being of people living in Nigeria between 2005 and 2016

• The extent Gross Domestic Product (GDP) growth has impacted on the Economic Well-being of citizens of Nigeria

Research Hypothesis

These stated hypotheses shall guide this study;

Null Hypothesis

• Ho1: There are no positive/significant trends between Gross Domestic Product (GDP) growth and Economic Well-being in Nigeria (2005 - 2016)

• Ho2: Gross Domestic Product (GDP) growth has not impacted on the Economic Well-being of citizens of Nigeria

Alternative Hypothesis

• Ha1: There are positive/significant trends between Gross Domestic Product (GDP) growth and Economic Well-being in Nigeria (2005 - 2016)

• Ha2: Gross Domestic Product (GDP) growth has impacted on the Economic Well-being of citizens of Nigeria

Literature Review 

Conceptual Framework

The Concept of Gross Domestic Product (GDP): According to the 2008 System of National Account definition (SNA, 2009), the GDP is comprised of the total market value of all final goods and services produced in the country (within the geographical boundaries) in a given period of time. Mankiw and Tayor gave an almost identical definition. Schepelmann et al. gave detailed explanation of the GDP in relation to three key words: i) gross - the impairment of the value of capital used in production of goods and services is not taken away from the total value of GDP, ii) domestic - only applies to activities in the domestic economy regardless of ownership, iii) product - refers to what is produced, i.e. goods and services are treated as an output of the economy. 

Schepelmann et al. put forward that crossing points of the economy can be easily converted into three (3) different approaches in the GDP computation, i.e. the calculation of GDP: 1. expenditure approach, 2. production approach, 3. income approach. According to the approach of spending (expenditure method) with regards to all goods and services purchased in the economy, i.e. a measure of the total value of personal, investment and government spending, plus the value of exports minus the value of imports. It is put together in this formula: GDP = C+I+G+(X-M), given that C is consumption, I investment, G government spending, X export, and M import. Another approach is the output or production method which measures the value added that every sector of the economy contributes to the final output; in this regard, the GDP is the sum of market value reported final production which have made local businesses during an accounting period (usually one year). Finally, is the access of income also known as income method which adds the benefits of productive factors received by different people and institutions. As such, the GDP is seen here as the sum of wages and salaries, other production taxes and gross operating surplus. Not withstanding the method used for the calculation of the GDP, the calculation should always result in the same number as the above three methods are equivalent: total value added of the manufacturing process is equal to the sum of income generated, which is in turn equal to the total expenditure. 

Likewise, Onuoha et al [3] posited that the Gross Domestic Product could be defined as the market value of all officially recognized final goods and services produced within a country in a given period of time. Gross Domestic Product is important in an economy because it is used to determine if an economy is growing more quickly or slowly. Also, it is used to compare the size of economies throughout the world. Again, the Gross Domestic Product is used in the comparison of relative growth rate of economies throughout the world. For instance, the Federal Reserves in the United States uses it as one of the indicators of whether the economy needs to be restrained or stimulated [3].

Other Scholarly definition of GDP: Samuelson, explained Gross Domestic Product as the name given to the total market value of the final goods and services produced within a nation during a given year. From his description, of Gross Domestic Product, GDP is used for many purposes but the most important one is to measure the overall performance of an economy and this overall performance could be measured as a flow of final products or as a flow of cost. Both approaches will yield the same total GDP since profit, is a residual. Kimberly, said that Gross Domestic Product is everything produced by all the people and all the companies within an economy. The difference between Gross Domestic Product and Gross National Product is the fact that GDP is concerned with the region in which income is generated and focuses on where the output is produced rather than who produces it. Ruffin, emphasized that Gross Domestic Product is the broadcast measure of the total output of the economy. Only final goods and services are included to avoid double counting of products. GDP can be calculated by measuring the total value of income. Nominal GDP is the value of final goods and services in current market prices. Nominal GDP can rise because of either increasing output or rise in the price of products. Real GDP is the measure of the volume of real goods and services by removing the effect of rising prices. He also, said that non-market goods, illegal goods and the value of leisure are not included in Gross Domestic Product because GDP is just a measure of the economic welfare and not a measure of economic “bads”. Abdulrasheed, in his work titled “The effect of inflation on GDP” stated that Gross Domestic Product is used as a means of adjusting the assets location and to decide where the best opportunity of investors lies. Paul, defines Gross Domestic Product as the dollar flow of total product for a nation. It could be measured using the flow-of-cost approach or the income approach. According to Paul, GDP is a measure of Net Economic Welfare (NEW). This is because the calculation of Net Economic Welfare adds to the GDP certain items such as value of leisure, homemakers services and do it yourself activities. It also subtracts from GDP unmet costs of pollution, other dis-amenities of modern urbanization and some other adjustments. 

And finally, Kumar, in his work titled “Macroeconomics theory, analysis and policy”, said that use of this word “gross” along with “domestic product” indicates that we are calculating domestic product inclusive of the depreciation allowance or consumption fixed capital.

Economic Well-being as a Concept

In conceptualizing economic well-being a study by Basu [4] developed economic well-being into a statistical method that is tagged; the well-being index. He discussed all the indicators and rationale for including them in as indices. 

The proposed economic well-being index (EWBI) is constructed on the basis of five different socio-economic dimensions, namely, health, knowledge; income, technological progress, and infrastructure (Table 1).

These dimensions are supposed to evaluate the society’s overall well-being and/or standard of living. There are two indicators to measure the health status of the people in the region: infant mortality and life expectancy at birth. We have included two indicators for knowledge: adult literacy and combined enrolment (primary to high school level) ratio. For income, we take per capita real income (real) to measure the purchasing capacity of the people, and this indicator, as described above, has been recognized as the single most important yardstick for well-being, until economists start constructing the composite measure of quality of life. Intensity of cropping, and fertilizer consumption are considered here as a measure of technological progress. 

Table 1: Indicators of Economic Well-being Index (EWBI) 

Finally we have infrastructural dimension and it is believed to be an essential element for growth and development. In our analysis, we have eight different indicators to capture this dimension. They include population per hospital bed, per capita electricity consumption, post offices, bank branches, telephone lines, road and railway route, and village electrification. These indicators focus on availability of health, financial, transport, communication and rural infrastructure respectively. The better infrastructure facilities help allocate resources quickly to every place, and reduce cost of production, hence induce economic growth and development process [5]. The higher value of the index indicates better level of well-being for the region in this analysis. Thus, our measure of well-being is a comprehensive composite measurement to capture the quality of life of the people.

Historical Aspects of the GDP as an Economic Measure

The view expressed by Ivkovic is that with the aim of monitoring the economic activities that take place within the country, national accounts are used. They can give a good overall picture of a given state and its overall activities, usually publicly presented with statistical tables and graphs. He stated further that the first estimates of national accounts in the western world were made in England in 1665 by Thomas Petty, whose main objective was to assess the tax capacity of a country. These original concepts were further developed with the guidance of the ‘father’ of economics Adam Smith, and after a gap of almost a century, again significantly revised by Alfred Marshall in the early 20th century. With regard to the formation of the national accounts, Cobb et al. report that in 1931 a group of experts was invited to respond to the current issues of the economy but they were unable to do so because the most recent data were for 1929. The Senate in 1932 asked the Commerce Department to prepare a comprehensive assessment of national income; a unique set of national accounts was made by a young economist Simon Kuznets. This became the prototype of what is nowadays called the GDP and is used as a de facto measure of success. Dasgupta [6] points out that the country’s GDP is the most commonly used indicator of national accounts designed to measure the value of production. The GDP lies on top of the System of National Accounts (SNA) and its defined and standardized methodology enables international comparison anywhere in the world. 

The first official release of GDP data was published in the United States in 1942, motivated by the rapid need of the assessments and increase of manufacturing capabilities in the post-war economy. By this time, the main idea was the maximization of war production. The GDP was thus created in the wake of the Great Depression and World War II for the decision-makers to have at their disposal a measure of economic performance and activity and, actually, the historical circumstances have boosted the emergence and importance of specific economic measures. Certainly, the emergence of the GDP was a huge step at the time, which later proved to be very useful and successful since the GDP (with certain changes and modifications) ‘has lasted’ for 80 years. However, Michaelson et al. emphasize that the GDP quickly grew into a measure of national success because after World War II, the total production had become firmly entrenched as a key sign of the overall success of a country and was widely interpreted as a substitute for the progress of society, with devastating consequences for the people and the planet. Today’s widely used methodology of the GDP was prepared by the United Nations and was suggested by the SNA. The purpose and objective of the SNA is to provide comprehensive conceptual and accounting framework for the analysis and assessment of economic performance. 

According to Ivkovic the SNA consists of a coherent, consistent and integrated set of macroeconomic accounts, annual accounts (balance sheet) and tables, based on the internationally accepted and agreed concepts, definitions, and classifications and accounting rules. The SNA has its origin in 1947 when the United Nations Statistical Commission (UNSC) expressed and emphasized the need for international statistical standards to serve the development and updating of comparable statistics. The SNA was finally first issued in 1953, encompassing a detailed explanation of the methodology and terminology, and developed standardized tables for presenting the data. Throughout the history of the UNSC several national accounting standards were produced. The SNA of 1953 had two audits in 1960 and 1964. In 1968 the new SNA was prepared, which further developed and expanded the existing system primary by adding also the input-output accounts and balance sheet, focusing on the evaluation of constant prices and trying to approach the SNA and the Material Product System. This convergence was achieved by clarifying and defining the conceptual differences and expanding the definition with the aim of achieving comparability. A new SNA was adopted and jointly published in 1993 by five organizations: the Statistical Office of the European Communities (Eurostat), the International Monetary Fund (IMF), the Organization for Economic Co-operation and Development (OECD), the United Nations Statistics Division (UNSD) and the Regional Commissions of the UN and the World Bank. During the development of the SNA in 1993 they took into account the new features of the market economy. Release of the SNA 2008 from 2009, which represents an updated and revised version of the SNA in 1993, is characterized by issues related to changes in the economic environment, advances in methodological research and the release is more adapted to the needs of users. The Council of the European Union, together with Eurostat, modulated and adjusted the standard methodology of the 1993 SNA for the purposes of statistical offices in the European Union (EU), creating a European System of National and Regional Accounts (ESA). The ESA is compatible with the SNA and enables description of the total output of the region, country or group of countries, the different components of output and enables the evaluation and comparison with other economies. This is why the ESA serves as the central framework of reference for the social and economic statistics of the EU and it’s Member States.

For many nations of the world the GDP has also become a measure of economic progress and well-being for the people. Nigeria boast of the largest GDP in Africa, yet several of the citizens still live in abject poverty. One can only wonder when this gigantic GDP growth will transform better life and economic well-being for the people living in Nigeria.

Modern Attitudes to Measuring Economic Wellbeing 

In the words of Tremin while GDP and national income were never designed as a measure of economic wellbeing, and statisticians ‘never pretended’ they were often given this interpretation. But increasingly their unsuitability for this purpose was recognized. Arthur Pigou, the founder of modern welfare economics, argued that it is not just increases in national income that constituted improvements in national wellbeing; in particular he carefully distinguished whether the increased income was solely reflecting population growth, how it was distributed and how much it fluctuated. Moses Ambramovitz concluded: We must be highly sceptical of the view that long term changes in the rate of growth of welfare can be gauged even roughly from changes in the rate of growth of output. A common argument runs that GDP per capita can hardly be the benchmark for achieving community satisfaction when:

Theoretical Discourse

The theories of economic growth or long-run equilibrium analysis primarily account for the factors that are responsible for growth differential among countries. Perhaps, after the Great Depression in 1930s, the development of Keynesian model has changed many the thinking about the functioning of the real world. The primary focus of Keynesiansim is to show how the steady state of the economy is influenced by the equilibrium values of output and employment through macroeconomic policies that is intended to bring about better economic well-being for the citizen.

The Solow-Swan growth model, within a neo-classical framework, emphasized the role of capital accumulation that would lead to a changing capital-output ratio. However, the Solow-Swan model does not fully explain some of these basic facts about growth in developing countries and their differential level of performance. This has led to a new set of growth theories that has indigenized the process of technological progress. The model is extended in two ways: firstly, it endows a crucial role to human capital and secondly to the share of national product devoted to investment in education.

The above theoretical literature according Basu [4] has motivated the empirical growth literature, as we find that considerable attention has been given to convergence across countries/regions and shows that the initial conditions of this vast array of countries differ significantly leading to differences in their growth performance. However, the issue of per capita income convergence can be either unconditional or conditional. Unconditional convergence refers to the tendency of poor countries/regions to grow faster than rich countries, while conditional convergence refers to convergence conditional on a determinate steady-state income level. On the other side, over the years, economists have come to sort a of consensus that per capita income as a measure to show the differential level of performance is rather weak and partial picture of a country’s development. The concept of accommodating other socio-economic indicators have taken up a significant amount of attention, since the United Nations [7] expert group recommended that, in addition to real per capital national income quantitative measures in the fields of health education, employment, and housing should be used for assessing the standard of living. So, real national income was to be supplemented by a further set of indices, reflecting various constituents and determinants of aggregate development/well-being [7]. 

The studies by Adelman and Morris also examined the interactions among the processes of social, economic and political change with the level and pace of economic development. One of the significant contributions to measure the quality of life with some social indicators was proposed by Morris D. Morris [8] and who constructed the Physical Quality of Life Index (PQLI) and later by Dasgupta and Weale [6]. UNDPs Human Development Index had brought together the production and distribution of commodities and the expansion and use of human capabilities in their measure. All these indices essentially focus on choices–on what people should have, be and do to be able to ensure their own livelihood, as they are based on indicators like, life expectancy, educational attainment, and per capita income, civil and political rights. These are thus some of the studies that have looked beyond the per capita income level, for a more comprehensive yardstick for development and well-being. Thus, we argue that the initial level of social indicators is also equally important to observe the level of differences in countries economic growth and subsequent level of well-being. We have outlined above that economic policy changes and their successful implementation are crucial to accelerate growth and sustainable well-being. Perhaps this is one of the most heated debates in the economic literature; as varying degrees of cross-country evidence suggest that the economic reform policies and/or the opening of the economy to outside world (a.k.a.Globalisation) and/or economic liberalization and its impact on growth and social development is not always positive; rather ambiguous! 

In some of the most cited papers in recent years on the relationship between trade policy and economic growth and poverty reduction, are probably Dollar [9], Ben-David [10], Sachs and Warner [11], Edwards [12], Frankel and Romar [13], Dollar [14] and Dollar and Kraay [15]. In all these studies, the basic message is to show that the evidence from the cross-country regression primarily suggests that countries that have opened up and took robust trade policies are the ones growing faster than others, in terms of economic growth. On contrary, there is still plenty of scepticism about the above relationship of liberalisation and economic growth. Stiglitz [16] raised concern about the success of reform policies, as he notes that ‘the limited success in so many of the countries means that there remain many opportunities for applying the lessons of such studies’. Rodriguez and Rodrik [17] raised analytical questions about some of the above studies, and concluded that ‘ little evidence that open trade policies—in the sense of lower tariff and non-tariff barriers to trade-are significantly associated with economic growth’. Moreover, another concern is now about the quality of growth, rather than quantity per se. In this context now the role of social policies and the better institutional framework is getting at the centre stage of the development policies across the countries. We presume that the legitimacy of reform policies, and/or the process of globalization would not be able to induce economic growth and social development.

Somehow, it has been a long held belief that economic development would necessarily lead to improvements in human welfare in a society, as the people’s material living conditions, such as food, housing, education, and medical care, are closely tied to the economic resources at their disposal and to the resources available to the government for the provision of public goods. Therefore, the governments of many developing countries Nigeria inclusive have made concerted efforts to promote economic growth in hopes of upgrading their people’s livelihood and enhancing public support. A huge emphasis on GDP growth, however, does not always yield the desired result, because exceptional GDP growth is often accompanied by other socioeconomic trends that could very well decrease human welfare. Economic development is not an end in itself; rather it is the means to increasing the well-being of the people, including both the objective conditions and the subjective evaluation of the development and their impact on human life. The latter has been receiving more and more attention from social scientists and policy makers in recent years.

Empirical Literature

Here, we examined country-wise analysis with regard to nature of relationship between different countries growth and the economic well-being of their citizens. Some of these works are reviewed below:

Ivković [18] carried out his study on the limitations of the GDP as a measure of progress and well-being. The concern of the paper is how that the gross domestic product has become a universal measure of progress and well-being. However, in this paper the limitations of the GDP are shown by defining and describing its historical aspects Moreover, the SWOT analysis is used to emphasize the weaknesses and restrictions of this monetary measure. Structured critiques of the gross domestic product make way for other measures of progress and well-being to be recognized and used in a more comprehensive way.

A similar study by Onuoha, Ibe, Njoku and Onuoha [3] was carried out on the Analysis of The Gross Domestic Product (G.D.P) of Nigeria from 1960 to 2012. Data on Nigerian Goss Domestic Product used for the study covers a period of fifty three years (1960 - 2012). The study revealed that the probability plot of the data shows that the data is not normal, while the test of homogeneity of variance in the data shows that the data is not homogeneous. It was found out after decomposing the data into its component parts, that Nigeria’s GDP has a strong trend component with little or no seasonal component and enough residual component. As such, Time series trend analysis was used in analyzing the data, since the data has a strong trend component with little or no seasonal component. The result of the trend analysis shows that Nigeria has a better economic growth.

Xiaogang and Jun [19] examines the subjective consequence of rising income inequality amidst the rapid economic growth in China. From the data collected from a national representative survey conducted in 2005, the study employed multi-level models to show that, while personal income improves life satisfaction, the effect decreases with the level of local economic development; moreover, the rate of local economic growth has a positive effect, but local income inequality has a negative effect, on individuals’ life satisfaction. The study findings help to clarify the mixed results in previous studies and point to the importance of both economic and social policies in improving people’s subjective well-being in China’s transitional economy.

Furthermore, Gerlter and Glewwe conducted an empirical Study of Income and household structure and economic growth in West Africa using both primary and secondary data collected on household income and economic growth (RGDP) and the methods of OLS and chi-square (x2) to analyses the data. The results of their study showed that household income has a direct effect on economic growth. In their study, they also established the hypothesis that household share of the per capital income has a long run significant positive effect on growth performance.

In the work of Stevenson and Wolfers [1] on Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox; they put forward that the “Easterlin paradox” suggests that there is no link between a society’s economic development and its average level of happiness. We re-assess this paradox analyzing multiple rich datasets spanning many decades. Using recent data on a broader array of countries, they established a clear positive link between average levels of subjective well-being and GDP per capita across countries, and find no evidence of a satiation point beyond which wealthier countries have no further increases in subjective well-being. They also show that the estimated relationship is consistent across many datasets and is similar to the relationship between subject well-being and income observed within countries. Finally, examining the relationship between changes in subjective well-being and income over time within countries we find economic growth associated with rising happiness. Together these findings indicate a clear role for absolute income and a more limited role for relative income comparisons in determining happiness.

The works of Osberg and Sharpe [20] on comparisons of Trends in GDP and Economic Well-being - the Impact of Social Capital discusses the connection between social capital and trends in economic well-being. Although arguments for the growth-enhancing aspects of social capital are concerned with the impacts of social capital on well-being, in practice research has focused on the relationship between social capital and trends in GDP per capita. However, there are severe disadvantages to using GDP per capita as an indicator of trends in economic wellbeing. Sections 2 to 4 develop an index of economic well-being for selected OECD countries for the period 1980 to 1996 and compare trends in economic well-being to trends in GDP. We argue that the economic well-being of a society depends on: (1) effective per capita consumption flows, which includes consumption of marketed goods and services, unmarketed goods and services, and changes in life span and in leisure; (2) net societal accumulation of stocks of productive resources, including tangible capital and housing stocks, human capital and R&D investment, environmental costs, and net change in level of foreign indebtedness; (3) income distribution, (as indicated by the Gini index of inequality, and depth and incidence of poverty); and (4) economic security (from unemployment, ill health, single parent poverty and poverty in old age). Estimates of the overall index and the sub-components are presented for 1980-1996 for the USA, UK, Canada, Australia, Norway and Sweden. In every case, growth in GDP per capita exceeds growth in economic wellbeing, although to different degrees in different countries. Section 5 then discusses why the connection between social capital and trends in economic well-being might be stronger than the relationship between social capital and GDP per person.

Basu [4] paper provides empirical evidence, from the study of sixteen major Indian states for the period 1980-2001, that under the economic reform process, the better institutional mechanism could actually help economies to grow faster with higher level of economic well-being. We estimate economic well-being index (by aggregating fifteen socio-economic variables, viz, education, infrastructure, technological progress, income, etc.) and also index of good governance (by aggregating thirteen variables indicating rule of law, government functioning, public services, press freedom, etc) by multivariate statistical measures. Panel regression showed that governance measures, and economic policy variables are crucial to explain differential level of development performance across states in India during the last two decades.

Gaps in Previous Studies

From above, there have been numerous valuable studies on the Analysis of trends between Gross Domestic Product (GDP) growth and Economic Well-being in various countries [1,3-4,18-20] with mixed evidence of trends between Gross Domestic Product (GDP) growth and Economic Well-being. While some of these studies were conducted prior to 2001(the democracy era when more conscious effort was directed at making better the economic well-being of the citizens of Nigeria) most of the studies were conducted outside Nigerian economy with issues not directly related to analysis of trends between Gross Domestic Product (GDP) growth and Economic Well-being in Nigeria, bringing to the fore the gaps this study intend to fill. 

Theoretical Framework of the Study

The theoretical framework that shall be used in this study is the Leibenstein’s theory because its propositions best depicts the Nigerian economic growth situation. For example, the theory puts forward that undeveloped countries are characterized by vicious cycle of poverty. This is true for the condition of the citizen of Nigeria. The theory recognizes that the way out is for a certain critical minimum effort should be put in to raise per capita income to a level at which sustained development could be maintained. This effort the Nigerian planners and drivers have been putting in place over the past years, so it is our aim to find out whether this efforts have truly raised the per capita income of the people over the period of study in order to better the economic well-being of the people.

Research Design

The research design is the structure in which research is conducted. A research design is the arrangement of conditions for the collections and analysis of the data in a manner that aims to combine to the research purpose. It constitutes the collection, measurement and analysis of data. Therefore, this section presents the research methods of carrying out the objectives specified in this study. It presents the population of study, Sources of data, Method of data analysis, Description of Research Variables. It also contains a detailed outline of systems of modeling equations that will be used to capture the objectives of this study as well as test of Validity and Reliability. In the study, majorly there are two variables: independent and dependent. The dependent variable is Economic well-being proxied by life expectancy and per capita income in Nigeria. The independent variable is Gross Domestic Product (GDP) growth rate in Nigeria.

Model Specification

In specifying our model for this study, our dependent variable shall be the Economic well-being Nigerian citizen proxied by life expectancy and per capita income, while our explanatory variables shall be the Gross Domestic Product (GDP) growth rate in Nigeria covering the period between 2005 and 2016. 

Based on the foregoing the study models can be specified in these two different forms:

First model

LEX = B_o + B₁ GDP_GR + U

Where:

• LEX:               Life expectancy at birth 

• GDPgr: Real Gross Domestic Product growth rate (representing the independent variable).

• B_o: the intercept of the regression equation

• B₁: Regression coefficient of life expectancy at birth 

• U: Error term (representing disturbance term which captures the error of omitted explanatory variables and the possible errors in the measurement and collection of data)

Second model

GDP_PC   = B_o + B₁ GDP_GR + U

Where:

• GDP_PC : Gross Domestic Product per capital. 

• GDPgr: Gross Domestic Product growth rate (representing the independent variable).

• B_o: the intercept of the regression equation

• B₁: Regression coefficient of Gross Domestic Product per capital

• U: Error term (representing disturbance term which captures the error of omitted explanatory variables and the possible errors in the measurement and collection of data)

Technique for Analysis

We shall use the Panel Least Square regression technique to estimate the values of the parameters b0, and b1. Besides, we will use the student’s t-values obtained to determine the statistical significance of the parameter estimates and the test of goodness of fit for the model using the R2 technique. This will enable us to know the percentage of variations between the dependent variable and the explanatory variables. Then, the f-statistics test to determine the overall significance of the multiple regression models and the Durbin –Watson test for the presence or absence of autocorrelation.       

Test of Time Series Property

This test will be done using the following: 

• The Unit root test: For testing for the stationarity of the chosen variables in order to avoid the generation of spurious regression results 

• The cointegration test: For testing if there exist the possibility of longrun relationship between the dependent variable and the independent variables in the model

Analytical Framework

The Panel Regression: The t-values for the various explanatory variables that will be obtained after estimation will be used to interpret the Panel or pooled regression estimates result. That is, the t-values that shall be obtained shall be compared with the table value at critical region to determine their statistically significance and/or otherwise.

The Co-Integration Test

This is to ascertain whether the variables have long run relationship or are stable over time. Using the Johansen co-integrating test, when the co-integration value obtained exceeds that of the table value at either 1% or 5% level of significance, we can then conclude that there is co-integration. But if otherwise, that is less than the table value either at 1% or 5%, then, there is no co-integration between the variables considered. 

Apriori Expectations

On apriori grounds, it is expected that as the GDP growth rate increases the economic well-being of the people should increase as well. As a result, a positive sign could be expected and should be statistically significant. 

Data Sources 

Based on the nature of the study, data collection will be based on secondary data. The study will source data from Statistical Bulletin of the Central Bank of Nigeria (CBN) and Annual Abstract of Statistic of the National Bureau of Statistic (NBS).

Econometric Software

In this study, we made use of the E-views software and the Statistical Package for Social Sciences (SPSS) for our analyses.

Presentation and Analysis of Results

Analysis with the use of the Ordinary Least Square (OLS) Regression technique: Using the annual time series data of the entire variables so chosen, we have our estimated model result to be:

Interpretation of Results

On a Priori Grounds or Economic Relationships: The explanatory variable’s parameter estimate possesses a positive sign. This implies that both life expectancy and GDP per capita have positive relationships with GDP growth rate. This conforms to a priori expectation since they possess positive signs. It was expected that as the gross domestic product growth rate increases, the life expectancy and the GDP per capita were also increasing as well. Therefore, the result obtained shows that the growth in the GDP has increased the life expectancy of the people and at the same increased their per capita income.

On Statistical Criterion

• Based on the coefficient values, a unit change in life expectancy and per capita income is caused by 2.54 and 3.14 unit rise in GDP growth rate respectively for variable. That is, as the GDP growth rate was rising life expectancy and GDP per capita were also rising alongside. This is in line with expected theoretical propositions. Using the rule of thumb of 2, it is evident that the t-value for the parameter estimates of the variables was statistically significant. This was also expected to be since the relationship was positively signed

• The R2 values of 0.73 and 0.89 for the two models respectively shows that there is very strong relationship between the dependent variables life expectancy and GDP per capita and the independent or explanatory variables been the GDP growth rate. The models have been able to explain about 73% and 89% of the relationship or variations; this is highly significant. This validates the fact that the GDP growth rate has been able to make better life expectancy of the citizen and increased the per capita income of the people as well. The implication is that the economic wellbeing of the people has being greatly enhanced and improved upon (Table 2)

• The F-stat; of 11.25 and 9.42 for both models with probability value 0.00 assumes a very huge value when compared with the table value of 5.95. This implies that in the overall, both models were statistically significant in explaining the relationship between the dependent and the explanatory variables

Table 2: Analysis with the Use of the Ordinary Least Square (OLS) Regression Technique

Source: Author’s Computations (2018)

This study is on Analysis of trends between Gross Domestic Product (GDP) growth rate and Economic Well-being in Nigeria (2005 - 2016). The findings of the study reveal that there is a positive and significant relationship and trends between Gross Domestic Product (GDP) growth and Economic Well-being of people living in Nigeria between 2005 and 2016. This implies that as the GDP growth rate is rising there has been significant improvement in the economic well-being and the quality of the life of the citizen of the Nigeria. Intuitively, it also imply that to very large and significant extent the Gross Domestic Product (GDP) growth has impacted on the Economic Well-being of citizens of Nigeria. This was reflected in the results obtained through the data analyzed, that is rising GDP growth in a way is enhancing and expanding the life expectancy index for the people and it is also increasing the per capita income of the people. 

As a result, the study therefore recommends that the rising GDP growth rate should be inclusive and sustainable so as to have shared prosperity among the citizen. Inclusive growth demands that we ensure that all of the people benefits from the proceeds of the GDP growth rate. Sustainable on the other hand, imply ensuring that the growth is not a short dash that will soon fade into recession or depression, adequate effort should be put in to ensure that the economic indices are well identified and are continuously working to keep them near and above the threshold that is required to keep the economy the rising path at all times. Besides, carefulness should be employed to ensure that this increase in the GDP growth rate is translated into better standard of living for the people and not diverted into private pockets for private use as the case with corrupt practices that has become widespread in our nation and has been impeding our economic rise over the years.

1. Stevenson, Betsey, and Justin Wolfers. “Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox.” IZA Discussion Paper No. 3654, 2008.

2. Aghion, P. and J.G. Williamson. Growth, Inequality and Globalisation. Theory, History and Policy. Cambridge University Press, 2000.

3. Onuoha, Desmond O. et al. “Analysis of the Gross Domestic Product (G.D.P) of Nigeria: 1960-2012.” West African Journal of Industrial & Academic Research, vol. 14, no. 1, June 2015.

4. Basu, Sudip Ranjan, Jaya Krishnakumar, and Gabriela Flores. “Spatial Distribution of Welfare across States and Different Socio-Economic Groups in Rural and Urban India.” Swiss National Science Foundation project, Department of Econometrics, University of Geneva, 2004.

5. Nagar, A.L. and Sudip Ranjan Basu. “Weighting Socio-Economic Indicators of Human Development: A Latent Variable Approach.” In Ullah, A., et al., eds. Handbook of Applied Econometrics and Statistical Inference. Marcel Dekker, New York, 2002.

6. Dasgupta, P. and M. Weale. “On Measuring the Quality of Life.” World Development, vol. 20, no. 1, 1992, pp. 119-131.

7. United Nations. International Definition and Measurement of Standards and Levels of Living. New York, United Nations, 1954.

8. Morris, D. Measuring the Condition of the World's Poor: The Physical Quality of Life Index. Pergamon, New York, 1979.

9. Dollar, D. “Outward-Oriented Developing Countries Really Do Grow More Rapidly: Evidence from 95 LDCs, 1976-85.” Economic Development and Cultural Change, April 1992, pp. 523-544.

10. Ben-David, D. “Equalising Exchange: Trade Liberalisation and Income Convergence.” Quarterly Journal of Economics, vol. 108, no. 3, 1993.

11. Sachs, J. and A. Warner. “Economic Reform and the Process of Global Integration.” Brookings Paper on Economic Activity, vol. 1, 1995, pp. 1-118.

12. Edwards, S. “Openness, Productivity and Growth: What Do We Really Know?” Economic Journal, vol. 108, 1998, pp. 383-398.

13. Frankel, J. and D. Romer. “Does Trade Cause Growth?” American Economic Review, vol. 89, no. 3, 1999, pp. 379-399.

14. Dollar, D. “Globalization, Inequality, and Poverty since 1980.” World Bank, Development Research Group, 2001.

15. Dollar, D. and A. Kraay. “Trade, Growth, and Poverty.” World Bank, Policy Research Working Paper #2199, 2001.

16. Stiglitz, J. “Whither Reform? Ten Years of the Transition.” ABCDE, World Bank, Washington, D.C., 28-30 April 1999.

17. Rodrik, D. “Institutions for High-Quality Growth: What They Are and How to Acquire Them.” WP#7540, NBER, 2000.

18. Ivković, A.F. “Limitations of the GDP as a Measure of Progress and Well-Being.” Review Article, 2016, UDK: 330.55.

19. Wu, Xiaogang, and Jun Li. “Economic Growth, Income Inequality and Subjective Well-Being: Evidence from China.” Population Studies Center Research Report 13-796, July 2013.

20. Osberg, Andrew, and Lars Sharpe. “Comparisons of Trends in GDP and Economic Well-Being: The Impact of Social Capital.”