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

To test for positive autocorrelation at significance , the test statistic d is compared to lower and upper critical values (dL, and dU,):

The lower critical value for the Durbin-Watson statistic (n = 50, k = 2) at 5% level of significance is 1.50 and the upper critical value is 1.59. Since 1.38 < 1.50, there is evidence of positive auto correlation.