Unit Root Using Eview

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

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You must next , next and finish

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

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Close this file from red button; we have needed only bottom file.

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

These are our variable if not clear you can zoom

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Step three Right click on the variable which u like to check sationarity. Right click and 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 view of above files, this window will be open

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Click on the 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

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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

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.

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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

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

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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 .

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

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We must go on our this, window and open all variables again.

Best ov luck . Saeed meo SAEID AAS MEO The superior university Lahore Pakistan.