Seasonal Differencing

Definition

Let $Y_t$ be a time series with seasonal period $s$.

Seasonal Differencing (Difference musiman) is denoted by ${\nabla }_s{Y}_t$ and is defined as:

$${\nabla }_s{Y}_t=Y_t-Y_{t-s}$$

Interpretation

It is used to remove seasonal trends. For example, subtracting the value of January last year from the value of January this year.

Related

• Differencing to Achieve Stationarity