Using monthly data from January 1992 to December 2000, we estimate the following equation for lightweight vehicle
Question:
equation for lightweight vehicle sales: Îln (Sales t) = 2.7108 + 0.3987Îln (Salest1) + ε t.
Table 5 gives sample autocorrelations of the errors from this model.
TABLE 5 Different Order Autocorrelations of Differences in the Logs of Vehicle Sales
A. Use the information in the table to assess the appropriateness of the specification given by the equation.
B. If the residuals from the AR(1) model above violate a regression assumption, how would you modify the AR(1) specification?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Quantitative Investment Analysis
ISBN: 978-1119104223
3rd edition
Authors: Richard A. DeFusco, Dennis W. McLeavey, Jerald E. Pinto, David E. Runkle
Question Posted: