Determinants of AFDC Caseload Growth. E. CONVERTING ANNUAL SERIES TO QUARTERLY SERIES

07/01/1997

Some of the series to be used in the analysis are available annually only. In order to use them, we created quarterly series that fit the annual series exactly and that also follow a smooth pattern across quarters in each year. An example is a State's population in a specific age group. For most of the annual series, we utilized a method that first fits a smooth curve called a "cubic spline" to the annual series and then uses the fitted curve to generate quarterly series.(9) In some instances, however, this method produced unreasonable quarterly values. When this was the case, we used a method that first fits a linear spline to the annual series and then uses the fitted curve to generate the quarterly series.(10) The exact method applied to each series depends on the nature of the original series -- stock data are treated differently than flow data and "end-of-year" series are treated differently than "annual averages."(11) The fact that we had to estimate quarterly values from annual series implies that the quarterly values are measured with error. This specification presumably biases coefficients toward zero.