Question

Autocorrelation in any regression model raises questions about the:

• A. Validity of the model
• B. Reliability of the model
• C. Statistical significance of the model
• D. Correlation between independent variables

Hint:

Autocorrelation suggests the model may need further adjustments or additional explanatory variables.

Answer 1

The Correct Option is A

Autocorrelation refers to the correlation of a variable with its past values, and when it appears in the residuals of a regression model, it suggests that the model is missing some important variable or structure.
- Validity of the model is questioned because autocorrelation indicates that the model does not capture all the patterns in the data.
- The reliability of the model might also be affected, but autocorrelation primarily impacts the validity
.- Statistical significance can be misleading when autocorrelation is present, but it’s the validity that is directly challenged