16. The data in Table P-16 show seasonally adjusted quarterly sales for Dickson Corporation and for the entire industry for 20 quarters.

a. Fit a linear regression model, and store the residuals. Plot the residuals against time, and obtain the residual autocorrelations. What do you find?

b. Calculate the Durbin-Watson statistic, and determine whether autocorrelation exists.

c. Estimate the regression coefficient, , using generalized differences. (Estimate with the lag 1 residual autocorrelation coefficient.)

d. Compare the standard errors of the two estimates of obtained using the original data and the generalized differences.Which estimate is more accurate? Explain.