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Tests of Seasonal and Non-Seasonal Serial Correlation

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Author Info
Donald W.K. Andrews () (Cowles Foundation, Yale University)
Liu, Xuemei Liu (Dept. of Statistics, Yale University)
Werner Ploberger (University of Rochester)

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Abstract

This paper considers tests for seasonal and non-seasonal serial correlation in time series and in the errors of regression models. The problem of testing for white noise against multiplicative seasonal ARMA(l,l)-ARMA(l,l) alternatives is investigated. This testing problem is non-standard due to nuisance parameters that appear under the alternative but not under the null hypothesis. The likelihood ratio (LR), sup Lagrange multiplier (LM), and exponential average LM and LR tests are considered and are shown to be asymptotically admissible for multiplicative seasonal ARMA(l,l)-ARMA(l,l) alternatives. In addition, they are shown to be consistent against all (weakly stationary strong mixing) non-white noise alternatives. Simulation results compare the tests to several tests in the literature. The exponential average test, Exp-LR_{infinity}, is found to be the best test overall. It performs substantially better than the Box-Pierce, Durbin-Watson, and Wallis tests.

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Publisher Info
Paper provided by Cowles Foundation, Yale University in its series Cowles Foundation Discussion Papers with number 1124.

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Length: 35 pages
Date of creation: May 1996
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Publication status: Published in Biometrika, 85, 1998
Handle: RePEc:cwl:cwldpp:1124

Note: CFP 971.
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Postal: Yale University, Box 208281, New Haven, CT 06520-8281 USA
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Web page: http://cowles.econ.yale.edu/
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA

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Related research
Keywords: Autoregressive moving average model; consistent test; Lagrange multiplier test; likelihood ratio test; multiplicative seasonal ARMA model; nonstandard testing problem; seasonality; test of white noise.;

References listed on IDEAS
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  1. Andrews, Donald W K & Ploberger, Werner, 1994. "Optimal Tests When a Nuisance Parameter Is Present Only under the Alternative," Econometrica, Econometric Society, vol. 62(6), pages 1383-1414, November. [Downloadable!] (restricted)
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  2. Donald W.K. Andrews & Werner Ploberger, 1994. "Testing for Serial Correlation Against an ARMA(1,1) Process," Cowles Foundation Discussion Papers 1077, Cowles Foundation, Yale University. [Downloadable!]
  3. Donald W.K. Andrews & Werner Ploberger, 1993. "Admissibility of the Likelihood Ratio Test When a Nuisance Parameter Is Present OnlyUnder the Alternative," Cowles Foundation Discussion Papers 1058, Cowles Foundation, Yale University. [Downloadable!]
  4. Andrews, Donald W K, 1993. "Tests for Parameter Instability and Structural Change with Unknown Change Point," Econometrica, Econometric Society, vol. 61(4), pages 821-56, July. [Downloadable!] (restricted)
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