Question: You are asked to estirate a model using monthly data from an Asian country where a two-week long holiday is celebrated every year based on
You are asked to estirate a model using monthly data from an Asian country where a two-week long holiday is celebrated every year based on the lunar cycle. The holiday moves from month to month each year and hence sometimes the entire holiday falls in one month, sometimes in another, or sometimes it overlaps two months. What type of seasonal model should you use to capture the seasonal and holiday effects? Use a model with monthly seasonal dummy variables Use a model with monthly seasonal dummy variables where one of the dummy variables takes on the value of 1 if the holiday falls in that month Use a model with twelve seasonal dummy variables and a set of monthly variables whose value is equal to the number of days in each month that the holiday affects
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