Using the data from the third problem in Section 11.1 for the data set EARNINGS, estimate an autoregressive model. Experiment with different values for p-order models until you have what you think is the most justifiable model. Explain your final model. Compare it with the time series model you estimated in Section 11.1.

Third problem in Section 11.1

Quarterly data for the number of employees and their weekly earnings are contained in the data set EARNINGS. Develop simple time series models for both employees and earnings. Discuss your findings and evaluate the models. What are your predictions for the third quarter of 2012? Discuss these results.