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Statistical Methods in Economics

Notes average length of all the cycles in the given series. However, it is difficult to determine the
average length of the cycle until the cycles are isolated from the series.
25.4 Key-Words

1. Independent variables : Those variables controlled by the experimenter.
2. Independent events : Events are independent when the occurrence of one has no effect on
the probability of the occurrence of the other.
3. Inferential statistics : That branch of statistics that involves drawing inferences about
parameters of the population(s) from which you have sampled.
25.5 Review Questions

1. Describe the moving average method for smoothing time series data. Explain how this method is
applied in the isolation of trend, if an appropriate period is choosen.
2. Explain the concept and advantages of moving average method of obtaining secular trend.
3. What do you understand by time series analysis ? How the method of moving averages help
analysing a time series ?
4. What are the merits and Demerits of moving average method ?
5. What are the limitations of moving average method.

Answers: Self-Assessment
1. (i) length (ii) fluctuations (iii) 3-yearly
(iv) simple (v) arithmetic

25.6 Further Readings

1. Elementary Statistical Methods; SP. Gupta, Sultan Chand & Sons,
New Delhi - 110002.
2. Statistical Methods — An Introductory Text; Jyoti Prasad Medhi, New Age
International Publishers, New Delhi - 110002.
3. Statistics; E. Narayanan Nadar, PHI Learning Private Limied, New Delhi - 110012.
4. Quantitative Methods—Theory and Applications; J.K. Sharma, Macmillan
Publishers India Ltd., New Delhi - 110002

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