Conversion of a Trend Equation

By conversion of a trend equation, we mean the change of trend equation formulated on one type of time basis into a trend equation on another type of time basis. Thus, if a trend equation of yearly period is transformed into a trend equation of monthly or quarterly period, or vice versa, it will be called conversion of a trend equation.

Methods of Conversion.

The following methods are to be adopted for converting a given trend equation into a required trend equation:

(i)  To convert an annual trend equation into a monthly trend equation :

 Divide a by 12, bX, by 12  12 (or 144), cX², by 12 × 12 × 12 (or 1728) and so on.

(ii) To convert a monthly trend equation into an annual trend equation.

 Multiply a by 12, bX by 12 × 12 × 12 (or 1728) and so on.

(iii)  To convert an annual trend equation into a Quarterly trend equation :

Divide a by 4, bX by 4 × 12 (or 48), cX², by 4 × 12 × 12 (or 576) and so on.

(iv) To convert a quarterly trend equation into an annual trend equation :

Multiply a by 4, bX by 4 × 12 and cX², by 4 × 12 × 12 and so on.