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EconStatsCraft › Line chart
The chart for anything with an order to it. Position along a line is the most accurately read encoding there is, which is why a line beats every alternative when the question is "what happened".
A line chart says two things at once: here are the values, and they are connected. The connection is a claim - that the gap between two points is a continuous journey rather than a jump - and it is true for a time series and false for categories. Most of the ways a line chart misleads come from the axis rather than the line: where zero sits, whether the scale is linear, and whether the horizontal spacing matches real time.
Anything with an order: time, age, distance, rank. If the x axis has a natural sequence, start here.
Each observation is a point at (t_i, y_i) and consecutive points are joined by a straight segment. That segment is INTERPOLATION: it asserts values between the observations that were never measured. On a monthly series the assertion is mild; on annual data plotted with twelve months between marks it invents eleven readings a year. Where the horizontal variable is categorical the segment asserts an ordering and a distance that do not exist, which is why a line joining "North, South, East" is a chart of nothing.
A series running from 183 to 241 plotted on an axis from 180 to 245 looks like a near-vertical climb; the same series from zero looks almost flat. Both are the same 31.6% rise. Neither axis is a lie and the reader will take a different message from each, which is why the axis choice deserves as much thought as the analysis. The defensible rule: zero-base anything where the reader will compare BAR LENGTHS or judge magnitude, and let the data fill the frame where they will read a RATE of change.
| If you see this | It means | Do this |
|---|---|---|
| A dramatic-looking rise | Check where the y-axis starts | Re-plot from zero and see whether the story survives |
| Two series appearing to move together | Dual axis with independently chosen ranges | Rebase both to 100 on one axis instead |
| A straight segment across a gap | Missing data bridged | Break the line; do not interpolate |
| Growth looking like it is slowing | Linear axis on a compounding series | Use a log scale; constant growth is a straight line there |
| A line over categories | The connection asserts an order | Use a bar chart |
| Fifty lines in a tangle | Beyond visual capacity | Facet, highlight a few, or label ends only |
Rebased to 100, for comparing series in different units. Area chart, which adds a magnitude claim to the same line.
Area 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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