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Data Collecting Instruments

                      See more about research methods:
                       
                      Data structure
                      A population is the entire collection of ‘things’ in which
                      we are interested. A sample is a subset of a population......

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UNIT ROOT TEST

Stationarity and Unit Root Testing l   The stationarity or otherwise of a series can strongly influence its behaviour and properties - e.g. persistence of shocks will be infinite for nonstationary series l   Spurious regressions. If two variables are trending over time, a regression of one on the other could have a high R 2 even if the two are totally unrelated l   If the variables in the regression model are not stationary, then it can be proved that the standard assumptions for asymptotic analysis will not be valid. In other words, the usual “ t -ratios” will not follow a t -distribution, so we cannot validly undertake hypothesis tests about the regression parameters. Stationary and Non-stationary Time Series Stationary Time Series l   A series is said to be stationary if the mean and autocovariances of the series do not depend on time. (A) Strictly Stationary : n   For a strictly stationary time series the distribution of   y(t) is independent...

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