13.50 The following regression model shows the buying interest for a product, which based on the price of the product, the quality, and the lagged buying interest rate for feedback from 45 consumers.

yn = 0.6948 - 0.13748x1t 10.07232

+ 0.2061x2t 10.08702

+ 0.2930yt-1 10.19352 R2 = 0.8673, d = 1.8451 and sc = 0.0947 where yn = buying interest rate x1 = price x2 = product quality

a. Estimate the autocorrelation parameter.

b. Why use a lagged dependent variable in a regression analysis?

c. Test at the 10% level the null hypothesis that, all else being equal, the model’s error terms are autocorrelated.