Test the following hypotheses with 05 H0 There is no firsto

Test the following hypotheses with = .05.

    H0: There is no first-order autocorrelation
    H1: There is positive first-order autocorrelation
    n = 50, k = 2, d = 1.38

Solution

Here we need lower critical value DL and upper critical value DU for = .05 and k = 2, n=50 from the table of \"Durbin-Watson Statistic\". From table we have

DL=1.462 and DU=1.628

Since test statistics d=1.38 is less than DL so reject the null hypothesis. That is there is statistical evidence of  positive first-order autocorrelation.