Page 218 - DMGT404 RESEARCH_METHODOLOGY

Research Methodology

Notes The oscillatory movements are termed as Seasonal Variations if their period of oscillation is
equal to one year, and as Cyclical Variations if the period is greater than one year.
A time series, where the time interval between successive observations is less than or equal to
one year, may have the effects of both the seasonal and cyclical variations. However, the seasonal
variations are absent if the time interval between successive observations is greater than one
year.
Although the periodic variations are more or less regular, they may not necessarily be uniformly
periodic, i.e., the pattern of their variations in different periods may or may not be identical in
respect of time period and size of periodic variations. For example, if a cycle is completed in five
years then its following cycle may take greater or less than five years for its completion.
1. Causes of Seasonal Variations: The main causes of seasonal variations are: (a) Climatic
Conditions and (b) Customs and Traditions

(a) Climatic Conditions: The changes in climatic conditions affect the value of time series
variable and the resulting changes are known as seasonal variations. For example,
the sale of woolen garments is generally at its peak in the month of November
because of the beginning of winter season. Similarly, timely rainfall may increase
agricultural output, prices of agricultural commodities are lowest during their
harvesting season, etc., reflect the effect of climatic conditions on the value of time
series variable.
(b) Customs and Traditions: The customs and traditions of the people also give rise to the
seasonal variations in time series.

Example: The sale of garments and ornaments may be highest during the marriage
season, sale of sweets during Diwali, etc., are variations that are the results of customs and
traditions of the people.
It should be noted here that both of the causes, mentioned above, occur regularly and are
often repeated after a gap of less than or equal to one year.
Objectives of Measuring Seasonal Variations: The main objectives of measuring seasonal
variations are:
(a) To analyse the past seasonal variations.
(b) To predict the value of a seasonal variation which could be helpful in short-term
planning.
(c) To eliminate the effect of seasonal variations from the data.
2. Causes of Cyclical Variations: Cyclical variations are revealed by most of the economic
and business time series and, therefore, are also termed as trade (or business) cycles. Any
trade cycle has four phases which are respectively known as boom, recession, depression
and recovery phases. Various phases repeat themselves regularly one after another in the
given sequence. The time interval between two identical phases is known as the period of
cyclical variations. The period is always greater than one year. Normally, the period of
cyclical variations lies between 3 to 10 years.
Objectives of Measuring Cyclical Variations: The main objectives of measuring cyclical
variations are:
(a) To analyse the behaviour of cyclical variations in the past.

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