Durbin Watson test

Durbin Watson is a test of autocorrelation:

Where r is the auto-correlation coefficient (between Yt and Yt-1).

And Since -1 £ r £ 1

• Conditions which Must be Fulfilled for DW to be a Valid Test
• 1. Constant term in regression
• 2. Regressors are non-stochastic
• 3. No lags of dependent variable

Critial values of DW:

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