Methods of Measuring Trend 📊

To study the long-term behavior of data, we need to eliminate short-term fluctuations (Seasonal, Cyclical, Irregular). This process is called "Measuring the Trend".

Classification of Methods 🌳

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Brief Overview

1. Freehand Curve Method (Graphic Method) ✏️

• How: Plot the data on a graph and draw a smooth line through the points by visual inspection.
• Pros: Simplest, no calculation.
• Cons: Highly subjective (different people draw different lines), not accurate for prediction.

2. Semi-Averages Method ➗

• How: Divide the data into two equal parts and find average of each part. Join the two average points.
• Pros: Objective (everyone gets same line), simple.
• Cons: Assumes straight line trend, not suitable if trend is non-linear.

3. Moving Averages Method 🌊

• How: Calculate averages of overlapping groups of data (e.g., 3-year, 5-year averages).
• Pros: Smooths out fluctuations very well, flexible for non-linear trends.
• Cons: Loses data points at the beginning and end, affected by extreme values.

4. Method of Least Squares 📐

• How: Fit a mathematical equation (Y = a + bX) that minimizes the sum of squared errors.
• Pros: Most accurate, gives a mathematical equation for prediction, objective.
• Cons: Difficult to calculate manually for large data.

Summary Comparison

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