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# Durbin Watson test

Year Consumption Transfers
1959 318127 22.9
1960 332293 24.4
1961 342653 28.1
1962 363761 28.8
1963 383135 30.3
1964 411735 31.3
1965 444288 33.9
1966 481769 37.5
1967 508694 45.4
1968 558727 53
1969 605516 58.8
1970 648948 71.6
1971 702414 85.2
1972 770724 94.6
1973 852512 108.1
1974 932378 128.4
1975 1030342 163
1976 1149774 176.9
1977 1278414 188.7
1978 1430394 202.5
1979 1596257 226.4
1980 1762904 270.2
1981 1944151 307
1982 2079306 342.3
1983 2286430 369.4
1984 2498404 378.3
1985 2712585 403.1
1986 2895167 428.4
1987 3105337 447.8
1988 3356583 476.1
1989 3596666 519.2
1990 3831501 573.1
1991 3971236 649.1
1992 4209653 729.2
1993 4454704 776.5
1994 4716394 810.1
1995 4968988 860.1
1996 5237499 902.4
1997 5529283 934.4
1998 5856036 955
1999 6250217 988.4
1. Open the Cons Trans 59 - 00.xls file. Use the BEA consumption and transfers data to investigate whether heteroscedasticity or autocorrelation is present in the model using the graphical approach (consumption as the dependent variable). Which answer best represents the degree of autocorrelation in the model? Using EXCEL or PHStat2, answer the following:
a) Neither autocorrelation nor heteroscedasticity appear to be present in the model.
b) Autocorrelation appears to be present in the model.
c) Heteroscedasticity appears to be present in the model.
d) Both autocorrelation and heteroscedasticity appear to be present in the model
2. Refer to the BEA consumption and transfers data from the Cons_Trans_59-00.xls file which was used in Problem 1, above. Analyze the signs of the residuals and values of the residuals to determine which best describes the pattern in the residuals
a) The signs of the residuals are randomly arranged and the values of the residuals remain constant.
b) The signs of the residuals reveal a non-random pattern and the values of the residuals remain constant.
c) The signs of the residuals reveal a non-random pattern and the values of the residuals increase as the transfers increase.
d) The signs reveal are randomly arranged and the values of the residuals increase as the transfers increase.
3. Use the Cons Trans 59-00.xls file, which was, used in Problems 1 & 2 and PHStat2 to calculate the d statistic. (Refer to the dialogue box on pages 537-538 of the Levine textbook.) The calculated d-statistic is:
a) 0.635267892
b) 1.355377418
c) 0.877545537
d) 0.355377418
4. The dl and du at a 0.01 level of significance in the Durbin-Watson test for autocorrelation are:
a) 1.44 & 1.54, respectively.
b) 1.48 & 1.57, respectively.
c) 1.25 & 1.34, respectively.
d) 1.24 & 1.42, respectively.
5. Use the results of the Durbin-Watson test in Problems 3 & 4 to determine if autocorrelation exists in the model. Test at the 0.01 level of significance. The statistical conclusion is:
a) No evidence of autocorrelation.
b) No conclusion can be drawn.
c) Autocorrelation exists in the model.
d) Not enough information to determine if autocorrelation exists.

#### Solution Summary

Step by step method for computing Durbin Watson test for auto correlation.

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