In Exercise 30 we looked at the weekly average retail price (cents per gallon) of regular gas nationwide from 2011 through June 2013. Here€™s the time series plot again:

a) What components can you see in this plot?
Here€™s an AR(14) model fit to these data.

Here€™s a time series plot of the model.

b) Does this model show that there is a (possibly unsuspected) 14-week seasonal cycle in gas prices? Explain.
c) Would you use this model to predict future gas prices? Explain.

Transcribed Image Text:

1 3.50- 825 30 90 120 Weeks Dependent variable is: Gas Price 130 total cases of which 14 are missing R squared.. 31.0% R squared (adjusted)# 30.4% 0.1587 wth 116 2114 degrees of freedom Variable Coefficient SECCoeff) t-ratio P-value Intercept 5.34942 0.2354 22.7 <0.0001 -0.463680 0.0647716 <0.0001 Lag14- ” 120 60 Weeks 30