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Practice Exercise · Q13
Q.

Fit a straight-line tend by method of least squares for the following data and also find the trend value for year 1998:

Year199219931994199519961997
Production (in tons)210225275220240235
Sikkim CbseNCERTSubjective· 5mImportance★★★★★
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With an even number of years the origin is placed between 1994 and 1995 and xx stepped in half-years; least squares gives y=234.167+1.643xy=234.167+1.643x, and 1998 (x=7x=7) forecasts ≈ 245.67 tons.

Straight-line trend by least squares: y=a+bxy=a+bx with ∑x=0\sum x=0, where

a=∑yn,b=∑xy∑x2.a=\frac{\sum y}{n},\qquad b=\frac{\sum xy}{\sum x^2}.

For an even count of years the mid-point lies between the two central years, so xx is taken in units of half-year: …,−3,−1,1,3,…\ldots,-3,-1,1,3,\ldots

Steps

  1. n=6n=6; origin between 1994 and 1995, xx in half-years:
Yearyy (tons)xxx2x^2xyxy
1992210−5-525−1050-1050
1993225−3-39−675-675
1994275−1-11−275-275
1995220111220220
1996240339720720
1997235552511751175
Σ1405070115
  1. a=∑yn=14056=234.167.a=\dfrac{\sum y}{n}=\dfrac{1405}{6}=234.167.
  2. b=∑xy∑x2=11570=1.643.b=\dfrac{\sum xy}{\sum x^2}=\dfrac{115}{70}=1.643.
  3. Trend line: y=234.167+1.643 x.y=234.167+1.643\,x.
  4. Fitted trend values:

| Year | xx | y^\hat y | …

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