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 July 17, 2018, 11:09 pm ad1c9bdddf
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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
VARIABLE ESTIMATE ...
The presence of seasonality in sales is clearly assessed in this solution.