ECO 5375 701 Eco and Bus Forecasting Prof Tom Fomby Fall 2014 EXERCISE 10 Purpose To learn how to use build a multiplicative seasonal Box Jenkins model for the Plano Sales Tax Revenue data and use the model to predict the total sales tax revenue for 2006 for the Plano City manager You are to hand in this exercise on Thursday October 30 Download the program Plano Multiplicative BJ sas from the class website and use it to complete the following tasks i Fill in the below table d D p q P Q 0 0 0 0 0 1 0 1 1 0 1 0 1 1 1 1 p 24 q 1 2 3 12 AIC SBC p value of Chi lag 24 Using the AIC and SBC goodness of fit measures and the p value of the Chisquare test for white noise in the residuals of the fitted model which of the above models do you prefer Note You should in addition check to see if the coefficients of the model you choose are all statistically significant apart from the mean possibly Explain your answer ii Using your preferred model of choice forecast the Plano Sales tax revenue data for December 2005 and all of 2006 Report your point forecasts and their confidence intervals below Months Monthly Forecast 95 Confidence Interval Dec 05 Jan 06 Feb Mar Apr May June July Aug Sep Oct Nov Dec iii I want you to complete the following statements for the Plano City Manager Using the Multiplicative Seasonal Box Jenkins model I am projecting that the Total Sales Tax Revenues for the City of Plano in 2006 will be for 2006 Furthermore I am projecting that the 2006 revenues will be higher than they were in 2005 Show your calculations below
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