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Unformatted text preview: : sales = α + β1 D1 + β 2 D2 + β3 D3 + u , where sales is the quarterly party supply sales in thousands of dollars in OC; D1, D2, and D3 are dummies indicating the first, the second, and the third quarter respectively. 1 (1) How would you interpret the estimated intercept and slopes? (2) How would you test if sales in the third quarter are significantly different from those in the fourth quarter? Write down the null hypothesis and decide whether you need to do a t or an F test. (3) How would you test if sales in the first quarter are significantly different from those in the second quarter? Write down the null hypothesis and decide whether you would use a t test or an F test. (4) How would you test that sales do not have seasonality, i.e., there is no significant difference in sales across seasons? Write down the null hypothesis and decide if you would use a t test or an F test. 4. Suppose you are interested in learning how recession could change people’s charitable donation behavior. Suppose you have data on individual’s dollar amount donated to some good cause (Don) an...
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