Friday, January 9, 2009

Data Trap: Limited Series Length

The significance of an event (or nonevent) is easily distorted by limiting the scale and time period of a series. This example is from Odd Numbers:

perspectiveLIBOR

Looks like an epic increase, doesn’t it? Here’s the same data extended out one more year:

perspectiveLIBOR2

Whenever you look at trends over time, try to get as long a series as possible.