Runner Inc. a U.S. athletic shoe manufacturer estimates he 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, 3,….,28 [2007(I), 2007(II), …..2013(IV)]
D1 = 1, if t is quarter I (winter); 0 otherwise
D2 = 1, if t is quarter II (spring); 0 otherwise
D3 = 1 if t si quarter III (summer); 0 otherwise
The regression analysis produces the following results:
DEPENDENT VARIABLE: QT R-SQUARE F-RATIO P-VALUE ON F
OBSERVATIONS: 28 0.9651 159.01 0.0001
VARIABLE PARAMETER
ESTIMATE STANDARD
ERROR
T-RATIO
P-VALUE
INTERCEPT 184500 10310 17.90 0.0005
T 2100 340 6.18 0.0022
D1 3280 1510 2.17 0.0043
D2 6250 2220 2.82 0.0022
D3 7010 1580 4.44 0.0001