The data in Table P-16 show seasonally adjusted quarterly sales for Dickson Corporation and for the entire industry for 20 quarters.

a. Fit a linear regression model, and store the residuals. Plot the residuals against time, and obtain the residual autocorrelations. What do you find?
b. Calculate the Durbin-Watson statistic, and determine whether autocorrelation exists.
c. Estimate the regression coefficient, β1, using generalized differences. (Estimate p with the lag 1 residual autocorrelation coefficient.)
d. Compare the standard errors of the two estimates of β1 obtained using the original data and the generalized differences. Which estimate is more accurate? Explain.

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TABLE P-16 Dickson Sales 1,000s) Industry Sales (millions) A, Dickson Sales (1,000s) Indusiry Sales millions XT Year Quarter Year Quarter 2004 3 2005 1 37.1 36.6 37.6 38.3 39.3 40.2 41.1 41.4 2002 1 83.8 85.6 87.8 86.1 89.6 91.0 93.9 94.6 96.4 96.0 318 32.5 33.2 32.4 33.8 34.3 353 35.7 36.4 363 98.2 97.2 100.1 102.6 105.4 107.9 110.1 2003I 20061 20041 110.1 41.4