Browsing by Author "Njaramba, Stephen Githae"

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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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    Fiscal Devolution And Technical Efficiency Of County Governments In Kenya
    (IOSR-JEF, 2026-01-07) Nyaoko, John Mose; Njaramba, Stephen Githae; Korir, Julius
    Several fiscal decentralization and revenue independence programmes have been instituted since independence in Kenya in order to attain technical efficiency in the delivery of public goods and services. Notably, the enactment of the Constitution 2010 ushered in fiscal devolution as the main driver of economic growth through technical efficiency in delivering public goods and services. Technical efficiency is to be attained through reduction in costs associated with allocations and rent-seeking activities as they focus on transparency and allocative efficiency. A smaller and productive government is believed to enhance technical efficiency by reducing wastage of expenditure and raising income growth. However, being responsible for a larger fiscal capacity can offer both challenges and opportunities for local governments in developing countries. As the devolved funds increase to the counties in Kenya, it is expected that technical efficiency would also increase in the county public service provision as more inputs would be available in relatively small size government. Despite the fact that the allocations to counties have been increasing and increased independence through tax assignments, there seems to be no evidence of improved technical efficiency as there has been no significant improvement in provision of goods and services for devolved functions including health and agriculture. There has also been a decline in the county growth domestic product over the years. Additionally, revenue collections at the counties have remained low and declining, despite higher targets that are set by the county governments. The main objective of the study was to measure the technical efficiencies in the counties. Specifically, the study estimated technical efficiency index for the 47 county governments. The model used in the analysis was a Cobb Douglas Stochastic Frontier Analysis to compute the mean technical efficiency. The average technical efficiency across counties is 84 percent, implying an average of 16 percent technical inefficiency. Technical efficiency varies significantly across counties operating between 50 and 90 percent technical efficiency. Based on these findings, the study recommends that counties should optimize resource utilization to close the 16 percent efficiency gap.
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    Growth of housing prices in Kenya and its dynamic relationship with selected macroeconomic variables
    (Kenyatta University, 2017) Njaramba, Stephen Githae
    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. The government of Kenya has struggled to make housing affordable and also to encourage housing access and home ownership. This effort has not been quite successful since the housing prices continue to rise and also declining access to descent housing. The variables the housing prices respond towards and could inform the policies to manage the housing prices are not clear. Housing prices behavior have also 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. The purpose of this study was therefore to analyze the variables the housing prices respond to both in short-run and in long-run. The study also examined the dynamic relationship between housing prices and selected macroeconomic variables. In doing this, the study used time series data for the period 1960 to 2015 and adopted an ARDL and VAR models. The ARDL and VAR models were selected since the housing prices behaves differently from other goods’ prices, and as such, previous values of housing prices and other variables used were required to explain current behaviors. The ARDL model is best suited for small sample size and has a capacity to estimate short run and long-run dynamics. The ARDL model also has no burden of establishing the order of integration and it distinguishes dependent and explanatory variables. With ARDL, it is possible to use differing optimal number of lags among the variables. For VAR, the study used Toda and Yamamoto (1995) methodology. This is a modified version of granger causality test based on augmented VAR modeling. The study findings show that the sources of housing prices growth include 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. For the dynamic relationship between housing prices and the selected macroeconomic variables, the results 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 to avoid the cost that could result in case of instability in the housing market.
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    Supply Response of Kenyan Coffee in the World Market
    (2014-03-10) Njaramba, Stephen Githae; Kosimbei, G. K.; Etyang, Martin N.
    The drastic drop in Kenya coffee supply in the last twenty years has severely affected the country's export revenues as well as the livelihoods of two million small scale producers and over six million people who directly or indirectly depend on coffee. In spite of the central role which coffee has played in the county's development, Coffee production has shown a steady decline over the last two decades. Coffee production declined from an all time high of about 130,000 metric tons in 1987/88 to a low of about 42,000 metric tons in the 2010 coffee calendar year In this study the objective was to estimate the response of Kenyan coffee which is supplied at the world market. Coffee is an important crop to Kenya since it is a source of foreign exchange. It is also the main agricultural enterprise in some of the districts in the country and the major source of income to these districts. Therefore the research project sought to come up with the supply function of Kenyan coffee to the international market. Coffee supply in Kenya has continued to decline despite policy reforms in the coffee sector. The principal of cointegration and Error Correction Model were used to establish the effect of various variables to the supply of coffee to the international market. Despite the popular belief that falling international prices paid for coffee is the course of decline of supply from Kenya.,this study found out that the international prices did not have significant effect on the supply of coffee from Kenya to the international market. Rather the supply is affected by cost of inputs both in the short and long run, the cost of moving coffee from the farm to the market, weather and the policies employed by the government. All the other variables were found to be insignificant at 5 percent level.