Introductory Econometrics 4th Edition by Jeffrey Wooldridge

تمرين 18

In Example 10.6, we estimated a variant on Fair's model for predicting presidential election outcomes in the United States.
(i) What argument can be made for the error term in this equation being serially uncorrelated (Hint: How often do presidential elections take place )
(ii) When the OLS residuals from (10.23) are regressed on the lagged residuals, we obtain = - 068 and se( ) =.240. What do you conclude about serial correlation in the u t
(iii) Does the small sample size in this application worry you in testing for serial correlation