

Mohit Arora
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Durbin Watson Statistics

The DWS statistics is the number that tests the auto correlation in the errors/residuals from a regression analysis. It’s value will always lie between “0 & 4”" .DWS value of ‘2’ means there is no auto-correlation in the sample,whereas value towards “zero” from ‘2’ means there is +ve auto correlation & “towards 4”" from ‘2’ means -ve auto-correlation. Auto-correlation is a characteristic of data in which the correlation between the values of the same variables is based on related objects. In this data set Auto-correlation for variable ‘final’ it means that the marks of student 2 in final depends on the marks of student 1 in final and that of student 3 in final depends on the marks of student 2 in final and so on. If such auto-correlation occurs we should not build a Linear regression model for our model and we just need to move to time analysis Model.
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The formula for DWS is [summation {E(i)- E(i-1)^2} / summation {E(i)^2} ] , which is quite complex .Here ei means the expected value based on the regression equation which we have generated . As number of predictors in our model is 2 hence we need to look at the table for DWS with n= 105 & k=2 to obtain dl & du. We need to find these value using the table with alpha=0.05 . We get the value of dl= 1.63 & du = 1.72
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The durbin Watson table scale for our models ft3 & f23 is as shown below. Both models have 2 predictors so the scale of DWS would be same for both models

How to interpret Durbin Statistics Value
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After finding the dl & du value we place them on the scale of Durbin Watson .If the value of DWS we found or our model is lying between the zone of “No auto correlation” than we can be sure of “no autocorrelation” & hence we can proceed with the Linear Regression Model. If the value of DWS lies in Positive or Negative range of the scale than for sure Linear Regression model cannot be applied as it shows there is relationship between the observation values. Now if it comes in Indecisive zone the benefit of the doubt goes with the Researcher. Most of the times,he continues with the Linear Regression model results. As our Durbin statistics is “2.11 for ft3 model” & “2.23 for f23 model” both of which lies in No-Autocorrelation region we can say that there is no-autocorrelation and thus we can proceed further with the results of Linear regression models.