What does a Durbin Watson statistic value greater than 3 indicate?

A Durbin-Watson statistic value greater than 3 indicates evidence of negative autocorrelation in the residuals of a regression analysis. The Durbin-Watson statistic ranges from 0 to 4, where a value around 2 suggests there is no autocorrelation. A statistic significantly lower than 2 indicates positive autocorrelation, while values significantly higher than 2, especially over 3, suggest that the residuals are negatively correlated.

Negative autocorrelation occurs when a positive error is followed by a negative error, implying that if one observation is higher than expected, the next observation is likely to be lower than expected, leading to a pattern that is systematically opposite over time. Therefore, a Durbin-Watson statistic greater than 3 is a strong signal of this negative autocorrelation behavior in the errors of the regression model.