Write an email with the subject line "Housing Data and Stationarity".
Eugenio, As a follow-up to our meeting yesterday, a series of evaluations was conducted on the housing starts data to insure that the time series response variable was stationary (recall our brief discussion of results based on non-stationary time series). Dickey-Fuller and Augmented Dickey-Fuller (accounting for autocorrelation in the error term) unit root tests were used in the evaluation process. Given the limited number of observations for certain potentially important explanatory variables (e.g., %population change, etc. ), we tested the housing starts variable over 3 historical periods. The results are provided below: Period 1: 1959 through 2001 (obs=503) TEST TEST STATISTIC CRITICAL VALUE (p=0.05) DF -6.712 -1.95