Which of the following is a proper procedure for testing for autocorrelation in a panel data model without a lagged dependent variable?
A) Run a model that does not address autocorrelation and test for autocorrelated errors based on the residuals from that model.
B) Run a $\rho$-transformed model and test for autocorrelated errors based on the residuals from that model.
C) Assess whether there is a different intercept for each unit.
D) Run a probit or logit model and test for autocorrelated errors based on the residuals from that model.

Question

Quizplus · Accepted Answer

A common method for testing for autocorrelation in a panel data model without a lagged dependent variable is to run a model that does not address autocorrelation and test for autocorrelated errors based on the residuals from that model. One way to test for autocorrelation in the residuals is to use a Durbin-Watson test. If the test statistic indicates significant autocorrelation, then further investigation and modeling may be warranted.

Which of the Following Is a Proper Procedure for Testing ρ\rhoρ

Which of the Following Is a Proper Procedure for Testing $\rho$