ARIMA Modeling (Refer Pages 236-242 in Econometric Methods by Johnston and inardo (J!

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1.Just start E-views and click on file openforeign data as work file and select the file (ARIMA-PRA !I A".#$1% fro& the location where it is copied and then (enter%%. 'ou can see the data ( )* (It is a Monthl+ )ousing *tarts ()*% during 1,-,(.1 to 1,,/(.0%. /.1uick2raph"ine graph 3 then t+pe hs in the series list 4o5 to see the line graph corresponding to 6igure 7.0 in page /87 (in J 9:%. ;lock the 4otto& 4o5 and click on re&ove3 this 4o5 will disappear. *elect Add !e5t and !+pe( <!otal =ew Private )ousing >nits *tarted3 no *easonal Ad?ust&ent@ with the following options chosen( !e5t in 4o53 entre3 ;otto&3 lick =a&e and t+pe a na&e like 2raph 1 (so that this graph is saved in that na&e and availa4le for use an+ti&e%3 'ou can print this graph using print option or go to edit and cop+ and paste it in an+ work file and save and print later. 8. 1uick*eries *tatistics>nit root test 3 t+pe )s in the series list 4o5 and choose the following options( A:63 "evel3 "agged :ifference-03 Intercept . =ow +ou can see the results corresponding to !a4le 7.18 in J 9 :. !hen choose print and te5t spool file and t+pe a file na&e like aaa (the ta4le is saved in that file which is a note pad file3 later +ou can print this file to get the results%. 0. 1uick*eries *tatistics orrelogra& t+pe hs with "evel3 "ags to include - 8A3 =ow +ou can see A 6 and PA 6 with 1 statistics. !his corresponds to !a4le 7.10. hoose print and te5t spool file and t+pe a file na&e aaa (the correlogra& is saved in that file along with ta4les saved earlier3 later +ou can print this file to get the results%. -. !o run the chosen &odel (fro& the verification of correlogra&%- AR(1% 5 *AR(1/% &odelB use the following co&&ents (note( 4efore read footnote in page /87 in J9:%( (i% 2o to )*1 work file. !hen select the reCuired sa&ple o4servations using( *a&ple and t+pe 1,-,(.1 1,D0(1/ in the sa&ple range pairs 4o5 . (ii% 1uickEsti&ate ECuationthen t+pe hs c ar(1% sar(1/% in the eCuation specification 4o5 (hereB c stands for intercept3 ar(1% includes AR(1% ter& etc.%. =ow +ou can see the results corresponding to !a4le 7.1- in page /0.. !hen choose print and te5t spool file and t+pe a file na&e aaa (the results are saved in that file along with ta4les we saved earlier3 later +ou can print this file to get the results%. (iii% hoose 6orecastforecast na&e (t+pe an+ na&e such as hsf1%3 t+pe 1,D-(.1 1,,/(.0 in the forecast sa&ple with options( d+na&ic3 do graph3 forecast evaluation3 insert actuals for out of sa&ple. 'ou can get figure 7.- (e5cept actuals%. (iv% 2o to workfile()*1. *et sa&ple( 1,D-(.1 1,,/(.03 select show hs hsf1 (once we run forecast and select a na&e in previous step the forecast varia4le is saved in the na&e specified (as hsf1% auto&aticall+%. =ow +ou can see the data for these two varia4les. hoose Eiew graphline graph. =ow +ou can see the actual and forecast value for out of sa&ple period. 'ou can save this 4+ choosing print etc. (v% Eiew residual test correlogra& 1 statistics will give the figure (ta4le 7.1A%. 'ou can save in aaa for printing later. A. !o run &odified &odel( 1uickEsti&ate ECuationthen t+pe hs c ar(1% sar(1/% &a (1% *&a (1/% in the eCuation specification 4o5 . =ow +ou can see the results corresponding to !a4le 7.17. !hen choose print and te5t spool file and t+pe a file na&e aaa (to save%. !hen tr+ for

forecast and save it in hsf/. Also do the residual test as in step -(v%. Plot hs hsf1 and hsf/ and co&pare.