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UNECE Workshop on Seasonal Adjustment 20 – 23 February 2012, Ankara, Turkey. Impact of calendar effects. Anu Peltola Economic Statistics Section, UNECE. Overview. Meaning of calendar effects Causes of calendar effects Types of calendar effects Reason for calendar corrections

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impact of calendar effects

UNECE Workshop on Seasonal Adjustment

20 – 23 February 2012, Ankara, Turkey

Impact of calendar effects

Anu Peltola

Economic Statistics Section, UNECE

  • Meaning of calendar effects
  • Causes of calendar effects
  • Types of calendar effects
  • Reason for calendar corrections
  • Problematic issues
calendar e ff ects
Calendar Effects

= any economic effect related to the calendar

  • Seasonal component includes two types of effects: seasonal & calendar related
  • Removed before seasonal adjustment
  • Include:
    • number of different days in a month
    • composition of working and non-working days
    • moving holidays
    • leap year effect
  • Alter the level of activity measured
causes of calendar e ff ects
Causes of Calendar Effects
  • The rhythms of human activity:
    • 24-hour rotation of days
    • Weekly rest
    • Holiday periods
    • Traditional behaviour related to the calendar
  • These social habits and rhythms also cause seasonality
    • Changes in habits between winter and summer are not part of calendar effects, but seasonal effects
calendar correction
Calendar Correction
  • Removes non-seasonal calendar effects from the data, if statistical evidence and economic explanation
  • Four possibilities:
    • Trading days (working/non-working, 6 regressors))
    • National and moving holidays ((provided by the user))
    • Leap-year
    • Easter
  • Demetra+ pre-tests the presence of theseeffects, if tests are significant:
    • Using calendar adjustment / calendar correction improves significantly results!
working day effect
Working Day Effect
  • Difference between week/weekend days
    • Volume of production may be smaller on Saturdays and Sundays than on weekdays
  • Level of activity is higher if the month contains more weekdays
    • Working day effect
  • Sometimes, the number of weekdays doesn’t affect the level of activity at all, for example, when the factories operate in shifts every day.
trading day effect
Trading Day Effect

= Difference between all days of the week

  • Means that the level of the measured variable varies depending on the day of the week
  • Different days have a different weight/ effect on the data
moving holidays
Moving Holidays

= The impact on the series of holidays whose exact timing shifts from year to year

  • Examples of moving holidays:
    • Easter
    • Chinese New Year - where the exact date is determined by the cycles of the moon
    • Ramadan
  • Need to be added by the user to Demetra+
moving holidays1
Moving Holidays
  • April 2008: +3 working days vs. April 2007
    • Easter was not in April in 2008
  • Without any adjustment IPI grew about 8 per cent (April 2008 from April 2007)
  • If you working day adjust, growth was 5 per cent
national holidays
National Holidays
  • Influence the number of working days
  • Country specific historical list of public holidays and compensation holidays need to be kept
  • Improve estimates of the calendar component
  • Compensation holiday = additional holidays sometimes announced if a national holiday falls into the weekend
  • Need to be added by the user to Demetra+
leap year
Leap Year
  • The leap year adds one day in every four years
  • The day can be either a working day or it may fall into the weekend
  • Demetra+ tests for the significance of the leap year effect
trading working day adjustment
Trading/Working Day Adjustment
  • Aims at a series independent of the composition of days in a month
    • In the working day adjusted data everyday is equal
  • Improves quality of seasonal adjustment!
  • Easier to observe the underlying economic development
  • Should be applied only if these effects are present
  • Compile, maintain and add national holidays for better estimates!
problematic calendar issues
Problematic Calendar Issues
  • Changes in regular national holidays
    • Abolished holidays – new holidays
  • Regional differences in holiday calendars in a country
  • Complex set of moving holidays
  • Excessive use of compensation holidays
  • Changing durations of holidays
  • Combining national holidays with pre-defined calendar corrections
  • “Bridge effect” means that complete the holiday with the days which are decided by goverment (bonus days)