Unit Root Using Eview

SAEID AAS MEO The superior university Lahore Pakistan.

How to test unit root in Eviews

Step one

Arrange your data in excel file, if you are using Eviews 5 then save excel file as 2003,, from save as file

type 2003.blow is mine excel file.

Set two

Now drag your excel file on Eviews software I con which u have installed, when you will drag file on

Eviews software icon, this following window will open ,, you must do next, again next and then finish

and when u will finish a window will open that contain your data you should also close this file


When you will finish, finally this window will open and u should close this window.

You must next , next and finish


Now this window will remain open which is necessary for the further statistical test

Close this file from red button; we

have needed only bottom file.

These are our variable if not clear you can

zoom


Step three

Right click on the variable which u like to check sationarity. Right click and open

When u will click on view of above files, this window will be open

Now go to this file‘s view and in bottom u

will find unit root click on unit root.


When u will click on the unit root test following window will be appear

Note when the following window appears chose the following criteria. And ok

1. Test type= argumented dickey fuller test(which is selected by default there are many test which

are used to check sationarity but ADF IS most applicable

2. Select level means you want to check stationary at level ,if stationary comes at level than that’s

is good but if variable not stationary at level then u must select first difference , if variable is not

stationary at first difference you must select second difference e

3. Father you have no need to change anything because all the items are already selected by

default except level and first difference etc

Click on the unit root


When we will press ok this window will be open, which will tells the stationary of data either our

data is stationary or not at level. Let’s see results

Note if probability value comes less than five percent then we will say our data is stationary.

Here test type is already select

unit root is check on level

which is by default, means we

have no need to change

anything here we just do ok


We have seen our variable is not stationary at level so we are going again views, remember

don’t open new file go to above resulted windows views and then unit root and then chose first

deference and ok .and when we will press ok these results appear

This window is showing the results of data

stationary at level,, here we can see the

probability value of stationary means ADF

,value is more than five percent we will

accept null hypothesis

Null hypothesis= data is not stationary

Alternative hypothesis= data is stationary

Note : you have no need to check anything

but probability value must check

So our data is not stationary at level ,hence

we will again go views unit root and select

first difference rather than level and ok


Which file must be use to check sationarity of other variables.

You have noted I have

select now first

difference rather than

level and now ill do ok

and following results

will appear

Now our results are indicating that our

variable is stationary at first difference .so

we will use only two value in our analysis T.

VUALE and PROABLITY VALUE…

NOTE:DON’T CLOSE this result file now one

variable completed and we will again check

the other variable same like above

procedure now for other variable keep this

file remain unclose and go to following file

open variable check stationary at level if

stationary than good otherwise first or

second difference but again remember

don’t close any resulted file .


Best ov luck .

Saeed meo

We must go on our this, window and

open all variables again.

Unit Root Using Eview

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