Philippine E-Journals

EMPIRICAL ANALYSIS OF POPULATION AND ECONOMIC GROWTH NEXUS IN REGION XI: A VECTOR AUTOREGRESSIVE MODEL APPROACH

Christopher D Balubayan

 

Abstract:

This study was undertaken to examine the causal relationship between population growth and economic growth in Region XI. Annual time series data for the period 1985 to 2015 were utilized. SLR was used to determine the trend while VAR analysis was employed to investigate the nexus between the two variables of interests empirically. Results of trend analysis revealed a fluctuating population growth rate while economic growth faces a recession in a continually increasing rate for 30 years. A significant relationship between GRDP to APGR existed in a short-run period. APGR was affected by its previous value but does not affect GRDP thus, an increased on APGRs lag value increased population growth rate. The rate of change in GRDP affected the regions APGR, meaning an increased in GRDP increases APGR to some extent. The GRDPs previous lag value did not affect Region XIs own GRDP growth rate. The Granger test showed a unidirectional causality between APGR and GRDP revealing an economic growth-driven factor for population growth rate in the region. The Lag Order 1 was determined as the best fit model for VAR estimation based on AIC and SBIC criterion. This study suggests that; a carefully planned population growth strategy associated with institutional and policy innovation is beneficial to Region XI. Appropriate measures may be initiated by the local and regional government units to ensure that Region XIs economy may prosper at a higher level compared to population rate; and Increased regional market competitiveness is also essential in order to promote the regions domestic products and services