DW3.14instructions

# DW3.14instructions - My suggestion of recopying and then...

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Durbin Watson d and e(t) vs e(t-1)-Excel 3.14-Additional hints if you need them First thing you should figure out is how to calculate DW d by hand, and then do the arithmetic on excel. Note that in the formula d is a ratio of two sums of squares-compute the numerator and denominator separately. Isn't the denominator just square each of the 7 residuals and add them up? Now look at the numerator. The subscript goes from 2 to n so there are only 6 terms to add up. The terms are e(2)-e(1), e(3)-e(2), . .., up to e(7)-e(6). You need to calculate each of these 6 differences, then square each difference, and then add them up!
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Unformatted text preview: My suggestion of recopying and then moving up would then give you: A B C D 1 Resid e(1) 2 e(1) e(2) e(2)-e(1) 3 e(2) e(3) ... 7 e(6) e(7) e(7)-e(6) 8 e(7) If you ignore the first and last of these 8 rows, you can calculate easily the 6 differences in column C, rows 2-7 and in D, the six squares of the differences in C and get the numerator by adding up the 6 entries in column D. You should get d=1.78 Note that to do the e(t) vs e(t-1) scatterplot (Note I plot &quot;y&quot; vs &quot;x&quot;) involves just highlighting A2--B7 above, using chart wizard with column B the &quot;y&quot; axis variable. 9.5.05...
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