Trend Analysis

Separating the signal from the noise


Consider the graph below

Suppose this graph shows a fact about how bar height changes as we proceed rightward

Suppose further the data are noisy

What do we mean by "noise"?

We want to shrewdly determine the fact by mentally discounting the noise

Without giving any hints to your neighbors...

Take another look, then decide on the mostly likely fact:

a) Height decreases the farther right we go
b) Height starts out at a high plateau on the left, then switches to a low plateau as we move rightward
c) Height decreases at first, then increases ("U" curve) as we move rightward
d) Height increases as we move rightward
e) Cannot tell from the given data

Discussion?






Consider the graph below


Suppose this graph shows a fact about how bar height changes as we proceed rightward

Suppose further the data are noisy

We want to shrewdly determine the fact by mentally discounting the noise

Without giving any hints to your neighbors...

Take another look, then decide on the mostly likely fact:

a) Height decreases the farther right we go
b) Height starts out at a high plateau on the left, then switches to a low plateau as we move rightward
c) Height decreases at first, then increases ("U" curve) as we move rightward
d) Height increases as we move rightward
e) Cannot tell from the given data

Discussion?

Note! Both graphs show the same data

Comments?