Question

If you are using the method of least square for fitting trends in an annual time series containing 25 consecutive yearly values, what coded value do you assign to X if you want to project the trend and make a forecast five years beyond the last observed value?

Answer 1

If you want to make a forecast five years beyond the last observed value in an annual time series with 25 consecutive yearly values, you would assign the coded value of X as 26. This is because X represents the number of years from the first observed value, and you have 25 consecutive yearly values, so the last observed value would have a coded value of 25. Adding 5 years to that would result in a coded value of 25 + 5 = 30. However, since you want to project the trend and make a forecast five years beyond the last observed value, you would assign the coded value of X as 26.