Implications of not controlling for known events in seasonal adjustment

Håvard Hungnes, Terje Skjerpen, Jørn Ivar Hamre () and Xiaoming Chen Jansen ()
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Jørn Ivar Hamre: Statistics Norway
Xiaoming Chen Jansen: Statistics Norway

Economics Bulletin, 2024, vol. 44, issue 3, 975 - 982

Abstract: Seasonal patterns in time series can change due to important events, such as legislative changes. If not taken into account, seasonal adjustment can produce misleading results. Two legal changes in Norway in 2022 and 2023 boosted house prices at the start of the year. If no adjustment is made for this, an enhanced seasonal pattern appears, which implies a slight increase in house prices in late 2023. This prompted the Norwegian central bank to raise the key interest rate in December 2023. But house prices adjusted for the legislative changes actually show a decline in the second half of 2023.

Keywords: Outliers; X11; ARIMA; Seasonal filters; House prices; Legislative changes (search for similar items in EconPapers)
JEL-codes: C2 C8 (search for similar items in EconPapers)
Date: 2024-09-30
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