The RATS Software Forum

According to CATS manual, the season instruction includes s-1 centered seasonal dummies and these can be constructed in RATS as St - (1/s), where St is created by RATS procedure 'seasonal'. When I do this in RATS the seasonal dummies for quarterly data are (-0.25, -0.25, -0.25, 0.75), but as CATS creates only three seasonal dummies, shouldn't they be (-0.25, -0.25, 0.5, 0.0), or something like that?

1 plus three of the four centered dummies spans the same space as four uncentered seasonals. The reason for using the centered dummies is that they sum to zero over the sample (assuming a balanced number of quarters) which makes them easier to handle theoretically.