# intercept in each of the four quarters

This solution calculates the intercept in each of the four quarters. What do these values imply in terms about the presence of seasonality in sales?

© BrainMass Inc. brainmass.com October 10, 2019, 3:40 am ad1c9bdddfhttps://brainmass.com/economics/estimation-and-forecasting/intercept-in-each-of-the-four-quarters-430107

#### Solution Preview

See the attached file.

Consider a firm subject to quarter-to-quarter variation in its sales. Suppose that the following equation was estimated using quarterly data for the period 2000-2009 (the time variable goes from 1 to 37). The variables D1, D2 and D3, are respectively, dummy variables for the first, second, and third quarters (e.g., D1 is equal to one in the first quarter and zero otherwise).

Q1 + a + bt + c1D1 + c2D2 +c3D3

The results of the estimation are presented below:

DEPENDENT VARIABLE : QT F-RATIO: 761.133

OBSERVATIONS: 36 R2: 0.9761

PARAMETER STANDARD

VARIABLE ESTIMATE ...

#### Solution Summary

The presence of seasonality in sales is clearly assessed in this solution.