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EconStatsCraft › Area chart
Stacked, it shows composition changing over time: the outline is the total and each band is a share. The right chart for structural transformation, and the wrong one for comparing two bands with each other.
An area chart is a line chart with the space beneath it filled, and the fill is a claim: that the quantity accumulates, so the area under the curve means something. For a flow - sales per month, energy per day - it does. For a level such as a price or a temperature, the area under the line is a meaningless number and filling it merely adds ink.
When both the total and its breakdown matter - sector shares of GDP, spending by category, generation by fuel. If only the total matters use a line; if only the shares matter, a stacked bar or a share chart is clearer.
The mark is the region between the line y(t) and a baseline, usually zero. Its area is \int y\,dt, which is why the encoding suits a RATE: the area under a monthly sales line really is total sales. When the baseline is not zero the shaded region no longer corresponds to that integral, so an area chart on a truncated axis is not merely exaggerated - the fill encodes a quantity that does not exist.
Monthly electricity generation as an area chart is a good use: the shaded region between March and June really is the energy generated in that quarter, and the eye can compare quarters by area. The same chart drawn for electricity PRICE is not: the area under a price line has units of currency-times-months and corresponds to nothing anyone wants. The line is identical in both charts; only the fill is wrong, and only in one of them.
| If you see this | It means | Do this |
|---|---|---|
| Area chart of a price or an index | Area encodes accumulation, which is meaningless here | Use a line |
| Non-zero baseline | The fill no longer means the integral | Zero-base it or switch to a line |
| Two areas overlapping | One is hidden | Use lines, or facet |
| Negative values | The fill crosses the baseline | Use a line or a bar chart |
| Stacked areas, middle band hard to read | Its baseline moves | Put the steadiest series at the bottom, or facet |
| Reader asked to compare two bands | Only the bottom band has a flat base | Facet, or plot each against its own axis |
Line chart, for levels rather than flows. Stacked bar, for parts of a whole at a point in time.
Line chart · Bar chart · Stacked bar · Scatter plot · Bubble chart · Histogram · Box plot · Pie chart · Heat map · Rebased to 100 · Lorenz curve and Gini
Line chart · Area chart · Bar chart · Stacked bar · Scatter plot · Bubble chart · Histogram · Box plot · Pie chart · Heat map · Rebased to 100 · Lorenz curve and Gini
World map · Bivariate map · Flow map · India - state map · India - district map
Descriptive statistics · Summary by group · Two-way table · Classical statistical tests
Multiple regression (OLS) · Logit / Probit · Tobit (censored) · Truncated regression · Multinomial logit · Ordered logit / probit · Quantile regression · Poisson / Negative binomial
Time-varying coefficients (Kalman) · Unit root tests · Correlogram (ACF / PACF) · ARIMA / SARIMA · Rolling-origin cross-validation · Theta method · Unobserved components · STL forecasting · Forecast combination · Markov regime switching · Change frequency (resample) · ARCH / GARCH volatility · Decompose & filter · Spectral analysis · Exponential smoothing · Forecast accuracy
Yield curve (Nelson–Siegel / Svensson) · Dynamic factor model · Dynamic regression (ARIMAX) · Structural VAR · VAR · Granger causality · Cointegration · VECM · ARDL & bounds test
Panel regression · Panel cointegration tests · Heterogeneous panel: Mean Group & PMG · Gravity model of trade · Dynamic panel GMM · Panel diagnostics · Panel unit-root tests
Principal components (PCA) · Factor analysis · Cluster analysis
Conjoint analysis · MaxDiff (best–worst scaling) · TURF - reach of a product line · Price sensitivity (Van Westendorp) · Market basket analysis · Perceptual map · Scale reliability (Cronbach’s alpha) · Key driver analysis
Spatial autocorrelation · Spatial regression · Heckman selection · Instrumental variables (2SLS) · Difference-in-differences · Staggered difference-in-differences · Regression discontinuity · Matching & weighting · Oaxaca–Blinder decomposition
Black–Scholes option pricing · Bond price, duration & convexity · Merton distance to default · EMI / home loan planner · CAPM / beta estimation · Multi-factor model · Portfolio optimization · Value at Risk & Expected Shortfall · Performance & drawdown · Time value of money & NPV/IRR · Equity valuation (DDM, FCF, residual income) · Cost of capital (WACC) · Binomial option pricing · Option strategies (payoff & profit) · Forwards, futures & swaps · Credit risk & Basel capital · Extreme value theory (tail risk)
Life table · Life annuity · Life insurance pricing · Chain ladder reserving · Buhlmann credibility · Survival analysis · Mortality graduation · Aggregate loss model · Ruin probability · Multi-state Markov model · Loss severity fitting
Monte Carlo experiment · F-test, Wald & Chow · Structural breaks & stability
Regression vs machine learning · Ridge / Lasso / Elastic Net · Random forest · Gradient boosting
EconStatsCraft rigorous, plain-spoken econometrics
Regression, panel data, time series and the whole battery of tests. Every result is followed by a verdict you can defend.
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