Durbin Watson


I am new here and I am a second year university student studying economics. Any help here would be great and I thank-you in advance.

I am looking for autocorrelation in my residual which is 0.445..., so it is a positive residual autocorrelation. The problems lies where after commenting on your result the question asks how the result affects your analysis from now on. I dont know what to say after this. What does a positive autocorrelation mean to my analysis???


When you have a positive autocorrelation then your analysis will be affected in the following way

1)If you are using a OLS method estimators will be inefficient
2)R square will be exaggerated
3)Forcasting will be inefficient
4)t and F statistics may be biased or wrong