| Module 3: Interpreting Data
9. What about time? Time series plots
Many variables are measured at set intervals of time. For example, most common economic indicators are measured against time. Time series plots are line graphs that indicate patterns associated with the collection of data for the same variable over equally spaced time intervals. One common economic indicator is the Consumer Price Index (CPI).
The Australian Bureau of Statistics (2006) describes the CPI in the following way :
“The Consumer Price Index (CPI) is a measure of changes, over time, in retail prices of a constant basket of goods and services representative of consumption expenditure by resident households in Australian metropolitan areas.
The simplest way of thinking about the CPI is to imagine a basket of goods and services comprising items typically acquired by Australian households. As prices vary, the total price of this basket will also vary. The CPI is simply a measure of the changes in the price of this basket as the prices of items in it change.
The CPI measures price changes relating to the spending pattern of metropolitan private households. This group is termed the CPI population group. 'Metropolitan' is defined as the State capital cities, together with Darwin and Canberra.
The price of the CPI basket in the base period is assigned a value of 100.0 and the prices in other periods are expressed as percentages of the price in the base period. For example, if the price of the basket had increased by 35% since the base year, then the index would read 135.0. Similarly, if the price had fallen by 5% since the base year, the index would stand at 95.0. The current reference base period for the CPI is 1989–90.”
Information about the CPI can be drawn on to a time series plot. The data for this plot are drawn from data from the ABS site.
Figure 9.1 Time series plot, by quarter, of the Australian Consumer Price Index.
Note the steady increase in the CPI over the years. This represents a general upward (positive) trend in the CPI over time which indicates also that the cost of living has increased over time. CPI is used as an indicator for the cost of living. However, note that there were also periods where the CPI decreased from one quarter to the next. If you examined local and global conditions operating at those times you might be able to explain such decreases.
Another economic and social indicator that is measured over time is the unemployment rate. Figure 9.2 shows the annual average unemployment rate from 1981 to 1998. Examine it carefully to see if you can see any patterns in the graph.
Figure 9.2 Unemployment rate, annual average
(You probably can assume that 'persons' in the legend refers to combining the unemployment rate for males and females)
If you looked at this plot of annual average unemployment rate, you might notice a number of patterns in the data. You might notice that there was a short rise, then a steady decline and a rise and then a decline again in unemployment over the period from 1981-82 to 1997-98. But these data also show a change in the composition of unemployment. Note that from the early 1990's males experienced higher unemployment than females whereas female unemployment was higher than male unemployment in the 1980's. Note that the definition of unemployment may well affect the interpretation of this change.
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| Test your knowledge
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Can you suggest a cause for this pattern. |
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- There were fewer women looking for work from 1990 onwards so the proportion of women who were unemployed dropped
- The proportion of women and men looking for work has not changed over time but employers prefer to employ women because they work harder.
- In this period there has been a change in the type of employment that is available to people and this change suits women more than men.
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| Test your knowledge
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| Question
The cost of a litre of milk from 1970 to 2000 | | Answer |
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- Positive
- Negative
- Neutral
- Cyclical
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The price of a basic computer adjusted for inflation from 1975 to 2000. | | Answer |
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- Positive
- Negative
- Neutral
- Cyclical
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The temperature in Wollongong measured at the weather station at 9:00am on the first day of every month from 1970 to 2000. | | Answer |
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- Positive
- Negative
- Neutral
- Cyclical
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