Economics
posted by Devin .
In a regression analysis, suppose there is, in fact, no seasonal pattern to sales, and the trend line is estimated using dummy variables to account for seasonality. What effect would this have on the estimation?
My guess is that it wouldn't affect the estimation....am I correct or missing something?

If there is, in fact, no seasonal pattern, then the parameters on the dummies ought to be zero (or very close) and insignificant. So, yes, they should not affect the estimation.
However, the dummies might be picking up something else besides seasonal variations. Unless you have boatloads of data, a few odd observations could very well trigger significant values on the dummies. So you would be attributing a seasonal pattern to some other unrelated phenomena. So, be careful.
I hope this helps
Respond to this Question
Similar Questions

Economics
Rubax, a US manufacturer of athletic shoes, estimates the following linear trend model for shoe sales. Q1=a+bt+c1D1+c2D2+c3D3 where Q1=sales of athletic shoes in the tth quarter t= 1,2,...,28{1998(I), 1998(II),...2004(IV)} D1= 1 if … 
managerial economics
rubax, a u.s manufacturer of athletic shoes, estiamtes the following linear trend model for shoe sales Qt=a+bt+c1D1+c2D2+c3D3 where Qt=sales of athletic shoes in the tth quater t=1,2,...,28[1998(I),1998(II),...,2004(IV)] D1=1 if t … 
Statistics
I neep help on two questions! A condition that occurs in multiple regression analysis if the independent variables are themselves correlated is known as: 1. autocorrelation 2. stepwise regression 3. multicorrelation 4. multicollinearity … 
Economics
Rubax, a US manufacturer of athletic shoes, estimates the following linear trend model for shoe sales. Q1=a+bt+c1D1+c2D2+c3D3 where Q1=sales of athletic shoes in the tth quarter t= 1,2,...,28{1998(I), 1998(II),...2004(IV)} D1= 1 if … 
Economics
Economyst, please help Rubax__ a U.S. manufacturer of athletic shoes, estimates the following linear trend model for shoe sales: Qt= a + bt + c1D1 + c2D2 + c3D3 Where Qt= sales of athletic shoes in the tth quarter t= 1, 2,…., 28[2001(I), … 
Economyst please help
Economyst, please help Rubax__ a U.S. manufacturer of athletic shoes, estimates the following linear trend model for shoe sales: Qt= a + bt + c1D1 + c2D2 + c3D3 Where Qt= sales of athletic shoes in the tth quarter t= 1, 2,…., 28[2001(I), … 
Economyst please help
Rubax, a US manufacturer of athletic shoes, estimates the following linear trend model for shoe sales. Q1=a+bt+c1D1+c2D2+c3D3 where Q1=sales of athletic shoes in the tth quarter t= 1,2,...,28{1998(I), 1998(II),...2004(IV)} D1= 1 if … 
managerial economics
Cypress River Landscape Supply is a large wholesale supplier of landscaping materials in Georgia. Cypress River’s sales vary seasonally; sales tend to be higher in the spring months than in other months. a. Suppose Cypress River … 
Math: Statistics
1. A regression analysis includes the effect of Age, which is categorised into five levels. How many dummy variables should be defined for including it in the analysis? 
Economics
You decide to estimate the following quarterly sales forecasting model for new boat sales in your local county: Qt = a + bt + cD The equation is estimated using quarterly data on new boat sales in the county from the 3rd quarter of …