Suppose the following are the seasonal indices for the first

Suppose the following are the seasonal indices for the first three quarters of the year for a quarterly series:

Quarter

Seasonal Index

Q1

73.8

Q2

86.9

Q3

108.6

Remember that the seasonal indices should average 100 so you should be able to infer the seasonal index for Q4.

Furthermore, suppose that the estimated coeffcients from a regression of the deseasonalized series on Time are given below:

Coefficients

Intercept

2,854

Time

76.8

If the original value of the series in a Q4 was 2,050, then what is the seasonally adjusted value? (Please show your work and round your answer to 1 decimal place)

Solution

Q4 = 400 - (76.8+86.9+108.6) = 130.7