Hypothetical, Simple Example of Dummy Variables Use in Time

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Hypothetical, Simple Example of Dummy Variables Use in Time Powered By Docstoc
					Intro to TimeSeriesDummy Variables.xls
This workbook contains a simple hypothetical example of the use of dummy variables in time series.


The Sales sheet shows weekly sales of a premium ice-cream
Ice Cream Sales Example                               Regression of Sales on
                                                   Coupon Retail Price Intercept
     Parameters                                   #VALUE!   #VALUE! #VALUE!
b0                  6000                          #VALUE!   #VALUE! #VALUE!
b1                   -800                         #VALUE!   #VALUE! #VALUE!
b2                  1000                          #VALUE!   #VALUE! #VALUE!
SD(e )                100                         #VALUE!   #VALUE! #VALUE!
Week (t)    Retail Price Coupon  e       Sales
        0   $       4.00        0 #NAME? #NAME?
        1   $       4.00        0 #NAME? #NAME?                              Sales
        2   $       4.00        1 #NAME? #NAME?
        3   $       4.00        0 #NAME? #NAME?    5,000
        4   $       4.00        0 #NAME? #NAME?
                                                   4,000
        5   $       4.00        0 #NAME? #NAME?
        6   $       4.00        0 #NAME? #NAME?    3,000
        7   $       4.00        0 #NAME? #NAME?
                                                   2,000
        8   $       4.00        1 #NAME? #NAME?                                          12
        9   $       4.00        0 #NAME? #NAME?    1,000
       10   $       4.00        0 #NAME? #NAME?
                                                      0           2             8             14
       11   $       4.00        0 #NAME? #NAME?
       12   $       5.00        0 #NAME? #NAME?            0          5             10        15
       13   $       5.00        0 #NAME? #NAME?                                 Week
       14   $       5.00        1 #NAME? #NAME?
       15   $       5.00        0 #NAME? #NAME?
       16   $       5.00        0 #NAME? #NAME?                The Y axis scale is locked down. Double click it and se
       17   $       5.00        1 #NAME? #NAME?                the series disappears.
       18   $       5.00        0 #NAME? #NAME?
       19   $       5.00        0 #NAME? #NAME?
       20   $       5.00        0 #NAME? #NAME?
               17
                    20




ked down. Double click it and set back to Automatic if you change the parameter values and