Joint Temporal and Contemporaneous Aggregation

Abstract

After having considered the consequences of forecasting with estimated processes for contemporaneous aggregation in Chapter 5 and for temporal aggregation in Chapters 7 and 8 the two types of aggregation will be treated jointly in this chapter. In practice the two types of aggregation are often both present. For instance, the annual tax revenues of a country that consists of a number of states, is the sum of the monthly revenues in each state. Thus, the total figure is obtained by aggregating over time (temporally) and over regions (contemporaneously). In this chapter the particular type of temporal and contemporaneous aggregation is considered where all the disaggregate figures are simply added as in the foregoing example. This simplification is justified because it suffices to illustrate the pertinent problems. On the other hand, it helps to simplify some of the arguments.