Modiflcations of SEATS' Diagnostic for Detecting Over- or Underestimation of Seasonal Adjustment Decomposition Components

We consider two modiflcations of SEATS’ diagnostics for determining whether, for an estimated seasonal decomposition component, there is underestimation or overestimation, meaning inadequate or excessive suppression of the other components. The diagnostic of SEATS depends on variance estimates that assume an inflnitely long fllter has been applied. This results in substantial bias toward indicating underestimation. Our modifled diagnostics are calculated from time-varying variances associated with the flnite-length fllters actually used. Tests for the statistical signiflcance of any indicated misestimation are presented and analyzed. Our diagnostics and tests also apply to structural modelbased approaches to seasonal decomposition.

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