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Home  >  Volume 22 (2012)

Differencing When Growth Curve Is Exponential by Iheanyi S. Iwueze,Volume 22 (November, 2012), pp 211 – 218
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In this paper, we demonstrate the difficulties in using differencing as a procedure for isolating the exponential trend curve. For the polynomial curve of order d, the dth order differencing is required to isolate the trend. For the exponential growth curve the dth order backward differencing can hardly isolate the trend unless for very high values of d. On the other hand, successive ratios produce a constant. So we recommend successive ratios as a means of isolating the exponential growth curve from a series.

Keywords: Trend component, exponential growth curve, polynomial curve, backward differencing operator, successive ratios.