| Abstract: | This paper illustrates the use of the Box-Jenkins methodology by analyzing the Ohio Electrical Power Consumption time series. The three basic analytical steps discussed are the following: 1) Model identification - by matching sample autocorrelation functions against theoretical autocorrelation functions. 2) Non-linear estimation of parameters - by minimizing the sum of the squared residuals. 3) Diagnostic checking - by analyzing the pattern of the autocorrelation function of the residuals. Regular and adaptive forecasts are then developed using the appropriate model that emerges from the time series analysis. |
