Question: As an example of impure serial correlation caused by an incorrect functional form, lets return to the equation for the percentage of putts made (P

As an example of impure serial correlation caused by an incorrect functional form, let€™s return to the equation for the percentage of putts made (P_i) as a function of the length of the putt in feet (Li) that we discussed originally in Exercise 3 in Chapter 1. The complete documentation of that equation is

P, = 83.6 – 4.1L, (0.4) t = - 10.6 R? = .861 N = 19 DW = 0.48

a. Test Equation 9.32 for serial correlation using the Durbin€“Watson test at the 5-percent level.

b. Why might the linear functional form be inappropriate for this study? Explain your answer.

c. If we now reestimate Equation 9.32 using a double-log functional form, we obtain:

ÎnP = 5.50 – 0.921NL; (0.07) t = - 13.0 N = 19 R? = .903 DW = 1.22

Test Equation 9.33 for serial correlation using the Durbin€“Watson test at the 5-percent level.

d. Compare Equations 9.32 and 9.33. Which equation do you prefer? Why?

P, = 83.6 4.1L, (0.4) t = - 10.6 R? = .861 N = 19 DW = 0.48 nP = 5.50 0.921NL; (0.07) t = - 13.0 N = 19 R? = .903 DW = 1.22

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