Uses of Secular Trend

The secular trend of a time series has many uses for a statistician. Some such uses are outlined here as under:

• It is used for getting a general idea about the pattern of behaviour of a phenomenon under study. This very much helps the business men in forecasting and planning their future course of action relating to inventary and production etc. This, also, helps an economist in formulating his economic policies, and planning for a country.
• It is used in making comparisons between two or more time series and in drawing meaningful conclusions therefrom.
• It is used in the further study of the short time fluctuations of a time series viz: season, cyclic, and irregular ones. This is done by determining the trend values first and then isolation such trend values from the observed values of the time series either by the process of subtraction or division.
• It is used in the extra-polation of the future values of a phenomenon. With reference to the trend values we can very well forecast the future behaviour of a variable on the assumption that its past behaviour will be repeated in future.