Suppose that for a time-series model,you compute a Durbin-Watson statistic D = 1.409.Assume that n = 30 and α = 0.05.Then your decision is ______.
A) fail to reject the null hypothesis D = 0
B) reject the null hypothesis D = 0
C) fail to reject the null hypothesis ρ = 0
D) reject the null hypothesis ρ = 0
E) fail to reject the null hypothesis ρ 0

Question

Suppose that for a time-series model,you compute a Durbin-Watson statistic D = 1.409.Assume that n = 30 and α = 0.05.Then your decision is ______.
A) fail to reject the null hypothesis D = 0
B) reject the null hypothesis D = 0
C) fail to reject the null hypothesis ρ = 0
D) reject the null hypothesis ρ = 0
E) fail to reject the null hypothesis ρ > 0

Quizplus · Accepted Answer

The Durbin-Watson statistic tests for autocorrelation in the residuals. A value of 2 indicates no autocorrelation, while values less than 2 suggest positive autocorrelation. With D = 1.409, we are close to 2, so we fail to reject the null hypothesis of no autocorrelation (ρ = 0).

Suppose That for a Time-Series Model,you Compute a Durbin-Watson Statistic