The Perils of Polynomials

Dudley J. Cowden
Additional contact information
Dudley J. Cowden: University of North Carolina, Chapel Hill

Management Science, 1963, vol. 9, issue 4, 542-550

Abstract: It is extremely dangerous to extrapolate a polynomial trend. Although there are other sources of danger, this study concentrates on the statistical error, which is very large for end values and increases alarmingly with extrapolations. Relative standard errors of polynomial trend values are summarized, and generalizations are made concerning the relative magnitude of the standard errors with changes in: (1) the degree of equation; (2) the number of observations; (3) the position of the trend value in time. The most interesting generalization is that the relative variance of a polynomial of degree m, as the position of the trend value departs farther and farther from the central position in time, may be described by a polynomial equation of degree 2m.

Date: 1963
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.9.4.542 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:9:y:1963:i:4:p:542-550

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().