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Box-Cox Transformation
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Before you start

Overview

Data considerations
Example of Box-Cox Transformatio
Example for Time Series
Learn more about Minitab Statistical Software
Perform the analysis

Enter your data
Interpret the results
Key results
Methods and formulas
Methods and formulas
An analyst collected data on the number of airline passengers for 108 months. The
use an ARIMA model to generate forecasts for the data. On a time series plot, the an
difference between the high and low seasonal peaks grows over time. This pattern i
variance is not stationary. The analyst performs a Box-Cox transformation to make t
stationary before the analyst fits the ARIMA model.
1. Open the sample data AirPassengers.mtw.
2. Choose Stat > Time Series > Box-Cox Transformation.
3. In Series, enter Number of Passengers.
4. In Seasonal period, enter 12.
5. Select Optimal λ so that Minitab Statistical Software searches for a transforma
6. In Stamp column for time scale, enter Date.
7. In Store transformed series in, enter Transformed. Click OK.

Interpret the results

The Method table shows the settings for the analysis and the value of λ for the trans

In these results, the seasonal period is 12 and the analysis searches for a λ value be
range of -1 and 2. The optimal value for λ is approximately -0.14. The analysis round
and uses the natural log transformation.

Box-Cox Transformation for Number of Passengers

Method

Seasonal period 12
Select optimal λ from interval [-1, 2]
Optimal λ -0.144439
Rounded optimal λ 0
Transformed series = ln(Number of Passengers)

Compare the time series of the original series to the time series plot of the transfor
that the transformation makes the variance stationary.

In these results, the time series plot of the original series shows the non-stationary
data, the difference between the high and low points in a seasonal cycle increases a
pattern shows that the variance increases as time passes.
 How-To

Box-Cox Transformation

Before you start

Overview

Data considerations
Examine the time series plot of the transformed series to verify that the transforma
Example variance stationary.

In these results, the time series plot of the transformed series shows an approxima
Perform the analysis
between the high and low points in the seasonal cycles. This pattern shows that the
makes the variance stationary.
Enter your data
Also examine the time series plot of the transformed data to assess other importan
the transformed series. For example, the assumptions for an ARIMA model include
Interpret the results
a stationary mean in addition to a stationary variance. If a time series plot of the tra
shows that the transformed series does not have a stationary mean, try Augmented
Key results to see whether differencing the data makes the mean of the series stationary.

Methods and formulas In these results, the transformed series shows an upwards trend. This pattern show
the series is not stationary. Use the Augmented Dickey-Fuller Test on the stored col
transformed data to determine if differencing makes the series stationary.
Methods and formulas

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