Hallo!
Got the following problem.
In a country you can live in three different citys, A, B and C, the population is constant.
Each year;
70% of the residents in city A stay, 20% move to city B and 10% move to city C
90% of the residents in city B stay, 5% move to city A and 5% move to city C
50% of the residents in city C stay, 45% move to city A and 5% move to city B
I am suppose to explain this as an autoregressive process.
Through some datamining i found that the process is an AR(3) process, with coefficents
2,1 -1.3725 0.2725
My question is, is it possible to solve this analytically, without Least squares trial and error?
Thanks!