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Table 6-12 on the textbook's Web site gives non seasonally adjusted quarterly data on the retail sales of hobby, toy, and game stores (in millions) for the period 1992:1 to 2008: II.

Consider the following model:

Salest = B1 + B2D2t + B3D3t + B4D4t + ut

where

D2 = 1 in the second quarter, = 0 if otherwise

D3 = 1 in the third quarter, = 0 if otherwise

D4 = 1 in the fourth quarter, = 0 if otherwise

a. Estimate the preceding regression.

b. What is the interpretation of the various coefficients?

c. Give a logical reason for why the results are this way.

*d. How would you use the estimated regression to depersonalize the data?

Consider the following model:

Salest = B1 + B2D2t + B3D3t + B4D4t + ut

where

D2 = 1 in the second quarter, = 0 if otherwise

D3 = 1 in the third quarter, = 0 if otherwise

D4 = 1 in the fourth quarter, = 0 if otherwise

a. Estimate the preceding regression.

b. What is the interpretation of the various coefficients?

c. Give a logical reason for why the results are this way.

*d. How would you use the estimated regression to depersonalize the data?

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