Explain Ratio To Link Relatives Method Of Measuring Seasonal Variations?

There are four methods of measuring seasonal variations including the percentage of annual average method, the ratio to moving average method, the ratio to trend method, the link relative method. In link relative method, first we calculate link relatives.

Link relatives = monthly or quarterly value / preceding monthly or quarterly value

Then we take averages of these link relatives. From these averages we calculate chain indicies.

Chain indicies = average of month or quarter * chain index of preceding month or quarter/ 100

For first quarter or month, we calculate two chain indicies. From these two indicies of first quarter or month, we calculate correction factor. Minus this correction factor from second quarter or month. Subtract twice of correction factor from third quarter or month and so on. In this way, we can get the seasonal incisies for each quarter or month.

2010  65    58  56  61

2011    68    63  63  67

2012  60    55  51  58

2013  60  55  51    58