Which of the following conditions must be fulfilled for the Durbin Watson test to be valid?
(I) The regression includes a constant term
(ii) The regressors are non-stochastic
(iii) There are no lags of the dependent variable in the regression
(iv) There are no lags of the independent variables in the regression
A) (i), (ii) and (iii) only
B) (i) and (ii) only
C) (i), (ii), (iii) and (iv)
D) (i), (ii), and (iv) only

Question

Quizplus · Accepted Answer

The Durbin Watson test requires a constant term in the regression (I), assumes the regressors are non-stochastic (ii), and is valid when there are no lags of the dependent variable in the regression (iii) to correctly test for autocorrelation in the residuals. Lags of independent variables do not invalidate the test.

Which of the Following Conditions Must Be Fulfilled for the Durbin