Browsing by Author "Mugendi, Charles"

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    Dynamic relationship between the housing prices and selected macroeconomic variables in Kenya
    (Stratford Peer Reviewed Journals and Book Publishing, 2018-08) Njaramba, Stephen Githae; Gachanja, Paul; Mugendi, Charles
    In Kenya housing prices are considered high and have still continued to rise. This has made housing affordability and access a preserve of the top income earners. Consequently, large population live in houses with reduced access to clean water, sanitation, unreliable and unhealthy energy sources, increased exposure to diseases and low levels of financial security. Arable land is also being converted to residential centers which is constraining on public goods provision and agricultural output. Housing prices behavior have been known to influence business cycle dynamics by affecting aggregate expenditure and also the performance of the financial system through their effect on the profitability and stability. This study examined the dynamic relationship between housing prices and selected macroeconomic variables in Kenya. In doing this, the study used time series data for the period 1960 to 2015 and VAR models. The VAR models were selected where Toda and Yamamoto (1995) methodology was used. This is a modified version of granger causality test based on augmented VAR modeling. The study findings indicate that the housing prices dynamically relate with the selected macroeconomic variables. The study therefore concludes that housing prices have a positive contemporaneous impact on the selected macroeconomic variables indicating the existence of mutually reinforcing cycles between the housing prices and the selected macroeconomic variables. Therefore, there is need to observe the housing prices movements to avoid the cost that could result in case of instability in the housing market.
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    Effect of Employment on the Urban Youth Savings: A Case Study of Nairobi City County, Kenya
    (Ijariie, 2024) Thuku, Thuku Jeremiah; Mugendi, Charles
    Savings play a vital role as they act as backstop for capital formation and economic growth. A better saving behavioristhe basis of a sound economic and financial policy. Studies on savings have historically taken a central position in several economic research areas. Issues and problems related to savings among households and individuals have gained significant importance in microeconomic studies as savings stimulate larger investments and higher gross domestic product growth. Studies conducted in developing countries have shown that savings remain low particularly among the youth due to various factors such as high unemployment rates, limited access to financial services and high dependency rates among other factors. Low savings inhibit the availability of investment funds. This research study examined the effect of employment on the urban youth savings using Ordinary Least Squares estimation method. The goal was to get an understanding on the effect of employment factors on the uptake of savings by the youth. A cross-sectional research design was adopted where primary data was collected from the youth in Nairobi City County. Random sampling technique was used to select the respondents in the survey where self-administered questionnaires were administered to 400 urban youth. The study’s results demonstrated a showed a positive relationship between employment on the level of savings among the urban youth. Otherfactorssuch asrate ofreturn was found positively affect savings while factors such as age, number of dependants and education effected savings negatively. The study concluded that creating more employment opportunities for the youth through quality job and through revitalizing both the formal and informal sector and offering higher rate of returns on savings would be critical in mobilization of savings.
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    Effects of Budget Deficits on the Exchange Rate in Kenya: 1993-2021.
    (Iosr Journal of Economics and Finance (Iosr-Jef), 2023) Ricy, Rianne Nyanchama; Mugendi, Charles
    Theexchange rate is considereda significant metric for a nation's competitivenessin the internationalmarket and economic performance in general. At the same time, the persistence and widening of the budget deficits in Kenya hasraised much concern among economists and policymakers since it determines a nation’s financial health.Raising the need to examine the connection between budget deficits and the EXR. With that being said, theories on howthe EXR is influenced by budget deficits are contradictory and despite attempts made by empirical studies tying budget deficits to theEXR,there remains to be controversy in their findings with each contention faced with a counter-argument. Therefore, this study utilizedquantitativeannual time series data spanningfrom 1993 to 2021 and the ARDL model to establishhowbudget deficitsaffect the EXR in Kenya, differentiating the indirect and direct effects,which is crucialin determination of the exact relationship between these variables. The study revealed that the budget deficit has a positive effect on the EXR. The study also revealed that the CAD and TOT have a positive effect on the EXR. However, the effect of the TOT on the EXR is insignificant. The study concluded that since budget deficits influence the movements in the EXR, there is need to keep the widening budget deficit in Kenya in check. Further, the study recommended the establishment of a regulatory framework tailored towards budget deficit reduction and debt sustainability.
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    The sources of housing prices growth in Kenya
    (International Peer Reviewed Journals and Books (IPRJB), 2018) Stephen Githae Njaramba, Stephen Githae; Gachanja, Paul; Mugendi, Charles
    Purpose: The objective of the study was to analyze the sources of housing prices growth in Kenya Methodology: The study used time series data for the period 1960 to 2015 and adopted an ARDL modeling approach. The model was useful as housing prices behaves differently from other goods’ prices, and as such, previous values of housing prices were necessary in estimations. The model also suited for small sample size and for its capacity to estimate short-run and long-run dynamics. The ARDL model also distinguishes dependent and explanatory variables. Results: The study findings showed that the sources of housing prices growth included household consumption expenditure, construction cost and property taxes both in the short-run and long-run. Private capital inflows and households’ indebtedness have a positive transitory effect to the housing prices. Against the popular view, supply of housing have no effect on housing prices. Unique contribution to theory, practice and policy: The Kenya National Housing Corporation needs to make public and encourage the use of readily available alternative building material besides the conventional material while not compromising on quality to address the overreaction of housing prices.