1. Techniques and an Example from Roger Simon’s The City Building Process
Time Series
Techniques and an Example from Roger Simon’s The City Building Process

2. What is a Time Series?
Numerical data ordered by intervals of time in chronological order
The analysis of a time series involves decomposing the series into its components, e.g.,
Trends
Cyclical and Seasonal Fluctuations
Irregular Fluctuations

3. Example of a Time Series
1888 2
1889 29
1890 33
1891 40
1892 56
1893 43
1894 39
1895 21
1896 38
Etc… 31

4. To Analyze a Time Series…
Identify the possible processes affecting the series:
Inflation or Deflation (for series of prices or expenditures)
Long term trend
Cyclical fluctuations
Seasonal fluctuations
Irregular fluctuations

5. Steps to Analyze Changing Construction Costs
Identify a measure:
Construction Cost? Or….
Construction Cost Per Square Foot
Convert to Constant Dollars
Measure the Trend
Identify cyclical or seasonal factors
Identify irregular fluctuations

6. Raw Construction Cost over Time

7. Properties Built over Time

8. Size of Buildings Built over Time

9. Adjusting for Inflation
if yrbuilt >887 and yrbuilt < 912 then let concost2=concost*20
if yrbuilt >911 and yrbuilt < 916 then let concost2=concost/.06
if yrbuilt = 916 then let concost2=concost/.065
if yrbuilt = 917 then let concost2=concost/.077
if yrbuilt = 918 then let concost2=concost/.090
if yrbuilt = 919 then let concost2=concost/.104
if yrbuilt = 920 then let concost2=concost/.120
if yrbuilt = 921 then let concost2=concost/.107
if yrbuilt = 922 then let concost2=concost/.103
if yrbuilt = 923 then let concost2=concost/.102
if yrbuilt = 924 then let concost2=concost/.102
if yrbuilt = 925 then let concost2=concost/.105
if yrbuilt = 926 then let concost2=concost/.106
if yrbuilt = 927 then let concost2=concost/.104
if yrbuilt = 928 then let concost2=concost/.102
if yrbuilt = 929 then let concost2=concost/.102
if yrbuilt=. then let concost2= concost *20
if concost=. Then let concost2 =.

10. Construction Cost Adjusted for Inflation

11. Comparing Raw and Inflation Adjusted Construction Costs

12. Construction Cost per Square Foot (Inflation Adjusted)

13. Construction Cost per Square Foot (Inflation Adjusted)

14. The Model: Cost per square foot = constant(a) + b1. year + b2
The Model: Cost per square foot = constant(a) + b1*year + b2*(last year’s cost per square foot)

15. The Model: Cost per square foot = constant(a) + b1. year + b2
The Model: Cost per square foot = constant(a) + b1*year + b2*last year’s cost per square foot
Cost per square foot = $ (last year’s cost) (year)
Number of cases: 39 ( ) =1
Adjusted R Square: 77.2

16. Trend and Residuals

17. The Data: 1. Year 2. Cost Per Square Foot 3
The Data: 1.Year Cost Per Square Foot 3. Last Year’s Cost Per Square Foot 4. Predicted Cost 5. Residual