Examining the presence of nonlinear relationship between natural gas consumption and economic growth in nigeria

Abstract

This paper examines the Presence of Nonlinear Relationship between Natural Gas Consumption and Economic Growth in Nigeria from 1981 to 2015. The Ramsey Reset test,Incremental F-test, and Wald test have been employed to test for non-linearity in the relationship between natural gas consumption and economic growth in Nigeria. The nonlinearity test results revealed that the relationship is nonlinear. However, the results are suggestive of the fact that linear models might not be the appropriate statistical tools for estimating the relationship between natural gas consumption and economic growth in Nigeria. Therefore, the paper recommends that the Nigeria’s policymakers consider taking into cognizance nonlinear modeling techniques as alternative tools for modeling, estimating and forecasting the relationship between natural gas consumption and economic growth in the country.