[R] Query on the Arimax modeling results

[Sanchi Bhatia]

Hi R team,



We’ve run Arimax models in R. We had a lot of queries around the
interpretation of the outputs.



*Dependent variable =* Volume (Growth %)

*Independent Variables =* 3 Macroeconomic variables (Growth %)



Following is the line of code



Arimax.Model <- auto.arima(y = input.data[,"Volume"], xreg =
input.data[,model.vars], seasonal = F)



Following is the output



Series: input.data[, "Volume"]

Regression with ARIMA(0,0,0) errors



*Coefficients:*

*      Birth_Rate_Change  Proportion_Female_labour  Females_20_39*

*                97.7658                     1.370        19.7528*

*s.e.            23.8575                     0.305         3.9874*



sigma^2 estimated as 4.316:  log likelihood=-24.07

AIC=56.15   AICc=61.86   BIC=58.09



*Query – *

   1. *Could you help us understand the interpretation of the coefficients
   obtained? Even if it’s not a growth model, how would we interpret the
   coefficients?*
   2. *Is there a limit on the number of regressors we can get in the model
   in ARIMAX modeling exercise in R? This is because we are only getting 3
   regressors at max.*



Will be very thankful if you could provide answers to our queries.



Best Regards



Regards,
Sanchi
……………………………
Sanchi Bhatia
Senior Analyst  |  o +91-124-495-3813  |  m +91-9810531725
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