QUESTION

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Reestimate the model in Exercise   9.22   by adding the regressor, expenditure on durable goods.
a. Is there a difference in the regression results you obtained in Exercise   9.22   and in this exercise? If so, what explains the difference?
  b  . If there is seasonality in the durable goods expenditure data, how would you account for it?>Refer to the quarterly appliance sales data given in Table 9.3. Consider the following model:
\[
\text { Sales }_{i}=$\alpha$_{1}+$\alpha$_{2} D_{2 i}+$\alpha$_{3} D_{3 i}+$\alpha$_{4} D_{4 i}+u_{i}
\]
where the   D   &qpos;s are dummies taking 1 and 0 values for quarters II through IV.
a. Estimate the preceding model for dishwashers, disposers, and washing machines individually.
b. How would you interpret the estimated slope coefficients?
c. How would you use the estimated   $\alpha$   &qpos;s to deseasonalize the sales data for individual appliances?>Note: DISH   =   dishwashers; DISP   =   garbage disposers; FRIG   =   refrigerators; WASH   =   washing machines; DUR   =   durable goods expenditure, billions of 1982 dollars.


Reestimate the model in Exercise 9.22 by adding the regressor, expenditure on durable goods. a. Is there a difference in the regression results you obtained in Exercise 9.22 and in this exercise? If so, what explains the difference? $b$. If there is seasonality in the durable goods expenditure data, how would you account for it?
Refer to the quarterly appliance sales data given in Table 9.3. Consider the following model: \[ \text { Sales }_{i}=\alpha_{1}+\alpha_{2} D_{2 i}+\alpha_{3} D_{3 i}+\alpha_{4} D_{4 i}+u_{i} \] where the $D$ 's are dummies taking 1 and 0 values for quarters II through IV. a. Estimate the preceding model for dishwashers, disposers, and washing machines individually. b. How would you interpret the estimated slope coefficients? c. How would you use the estimated $\alpha$ 's to deseasonalize the sales data for individual appliances?
\begin{tabular}{lcccccccccc} TABLE 9.3 & DISH & DISP & FRIG & WASH & DUR & DISH & DISP & FRIG & WASH & DUR \\ Quartery Data on & 841 & 798 & 1317 & 1271 & 252.6 & 480 & 706 & 943 & 1036 & 247.7 \\ Appliance Sales (in & 957 & 837 & 1615 & 1295 & 272.4 & 530 & 582 & 1175 & 1019 & 249.1 \\ thousands) and & 999 & 821 & 1662 & 1313 & 270.9 & 557 & 659 & 1269 & 1047 & 251.8 \\ Expenditure on & 960 & 858 & 1295 & 1150 & 273.9 & 602 & 837 & 973 & 918 & 262 \\ Durable Goods & 894 & 837 & 1271 & 1289 & 268.9 & 658 & 867 & 1102 & 1137 & 263.3 \\ (1978-I to 1985-IV) & 851 & 838 & 1555 & 1245 & 262.9 & 749 & 860 & 1344 & 1167 & 280 \\ Source: Bussiness Stafsics and & 863 & 832 & 1639 & 1270 & 270.9 & 827 & 918 & 1641 & 1230 & 288.5 \\ SurveyofCurrent Business, & 878 & 818 & 1238 & 1103 & 263.4 & 858 & 1017 & 1225 & 1081 & 300.5 \\ Department of Commerce & 792 & 868 & 1277 & 1273 & 260.6 & 808 & 1063 & 1429 & 1326 & 312.6 \\ (various issues). & 589 & 623 & 1258 & 1031 & 231.9 & 840 & 955 & 1699 & 1228 & 322.5 \\ & 657 & 662 & 1417 & 1143 & 242.7 & 893 & 973 & 1749 & 1297 & 324.3 \\ & 699 & 822 & 1185 & 1101 & 248.6 & 950 & 1096 & 1117 & 1198 & 333.1 \\ & 675 & 871 & 1196 & 1181 & 258.7 & 838 & 1086 & 1242 & 1292 & 344.8 \\ & 652 & 791 & 1410 & 1116 & 248.4 & 884 & 990 & 1684 & 1342 & 350.3 \\ & 628 & 759 & 1417 & 1190 & 255.5 & 905 & 1028 & 1764 & 1323 & 369.1 \\ & 529 & 734 & 919 & 1125 & 240.4 & 909 & 1003 & 1328 & 1274 & 356.4 \\ \hline \end{tabular} Note: DISH = dishwashers; DISP $=$ garbage disposers; FRIG $=$ refrigerators; WASH $=$ washing machines; DUR $=$ durable goods expenditure, billions of 1982 dollars.

Public Answer

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