Clinical trials

Understanding Research
Study Designs
Did investigator assign exposures ?

Yes No

Experimental study Observational study

Random allocation ? Comparison group ?

Yes No Yes No
Randomised Non-randomised
controlled trial controlled trial Analytical Descriptive
study study

Direction ?
E O E & O at same
time
E O
Case control Cross sectional
Cohort study study study
E= Exposure; O=Outcome
 Randomization process
• Randomization: The process by which each
subject has the same chance of being assigned
to either intervention or control group.
• tends to produce study groups comparable with
respect to known and unknown risk factors,
• removes investigator bias in the allocation of
participants,
• and guarantees that statistical tests will have
valid significance levels.
 Design- comparative trials
• There are two types of experimental
designs of comparative clinical trials:
• Fixed-sample trial: the number of patients
allocated to the two (or more) treatments
is fixed before the study begins.
• Sequential trials: the decision whether to
continue taking new patients is determined
by the results accumulated to that time.
• Discussed later
 Design- comparative trials
• There are two types of experimental
designs of comparative clinical trials:
• Fixed-sample trial: the number of patients
allocated to the two (or more) treatments
is fixed before the study begins.
• Sequential trials: the decision whether to
continue taking new patients is determined
by the results accumulated to that time.
• Discussed later
 Fixed-sample designs
Simple randomized design:
• Patients are randomized to the two (or more) treatments without
considering their characteristics.
• The main advantage is its simplicity and usefulness/ prognostic factors are
unknown/ or the potential subjects are homogeneous. .
• To allot “A” and “B” toss a coin H=A, T=B, design is
AAABBAAAAABABABBAAAABAA…as H or T occurs
Another method using simple random no. table
• With two treatments digit 0-4 = treatment A
digit 5-9 = treatment B
• Nos. in top row of table: 0 5 2 7 8 4 3 7 4 1 6 8 3 8 etc..
• Sequence of treatment: A B A B B A A B A A B B A B etc..
 Fixed-sample designs
Stratified randomized design( Randomized block design )
• patients can be grouped into prognostic categories, comparability among
treatment groups can be achieved ( randomization does not guarantee
equal groups).
• Repeated successive occurrence of the same treatment is eliminated
• Within each group, patients are randomly assigned to the treatments.
• For comparing 4 treatments, experimental units may be grouped in groups
of 4,( called replications) ; units in a replication- similar.
• Each treatment is then allocated by randomization to one unit in each
replication.
– AABB-ABBA-BBAA-BAAB-ABAB-AABB-…
 Designs
• Parallel:- subjects are randomly assigned to treatments, which
then proceed in parallel with each group.
• Aim to provide assurance that any difference between
treatments is in fact due to treatment effects
• This is unlike a crossover study where at first one group receives
treatment A and later followed by treatment B while the other
group receives treatment B followed by treatment A.
• A parallel designed clinical trial compares the results of a
treatment on two separate groups of patients. Each group of
participants is exposed to only one of the study interventions
• In a parallel group (also termed "completely randomized")
design, each patient receives a single treatment.
• In a crossover design, each patient receives some or all of the
treatments being studied.
• A parallel group study is a simple and commonly used clinical
design which compares two treatments. Usually a test therapy is
compared with a standard therapy.  
• The allocation of subjects to groups is usually achieved by
randomisation.
• The groups are typically named the treatment group and
the control group.
• Parallel group designs do not require the same number of
subjects in each group, although often similar numbers are
observed.
• The design is commonly used in randomised controlled trials.
• Statistical analysis
 Parallel and crossover
Crossover Designs
• Some trials may invoke a crossover design in which patients
serve as their own controls.
• For example, subjects may undergo an experimental therapy
for six weeks and then “cross over” to the control therapy for
another six weeks (or vice versa).
• Crossover designs are appealing because the patients serve
as their own controls.
• A crossover design typically will require a much smaller
sample size than a “parallel” design.
• Effects of the first treatment may still be present for
a long period, or where the first treatment
permanently changes the course of the disease
• Methods to minimize carry over effects and to test
for the presence of carry-over are available.
• Nearly all crossover designs have "balance",
In most crossover trials, in fact, each subject
receives all treatments.
• A crossover study has two advantages over a
non crossover longitudinal study.
• First, the influence of confounding covariates
 is reduced because each crossover patient
serves as his or her own control.
• Second, optimal crossover designs are 
statistically efficient and so require fewer
subjects than do non-crossover designs.
 Suitability of Cross-Over Design
• Suitable where there is no carryover effect
• Drug for asthma-a subject given salbutamol orally for
a specified period; then the other sal. Puff after the
washout period
• Randomization by tossing a coin-which pt. gets tr. A
first then B and which BA.
• Order effect removed.
• Variability in response group differences minimized.
• Efficiency increased due to small size.
• Limitations and disadvantages
• Suitable for chronic conditions; for curative treatments or rapidly changing
conditions, cross-over trials may be infeasible or unethical.
• Crossover studies often have two problems:
• First is the issue of "order" effects, because it is possible that the order in
which treatments are administered may affect the outcome. First with many
effects then a less harmfull.
Second is"carry-over" effects --can be avoided with a sufficiently long “wash-
out" period between treatments.
• However, the planning for sufficiently long wash-out periods does require
expert knowledge of the dynamics of the treatment, which often is
unknown, of course.
• Also, there might be a "learning" effect.
• This is important where you have controls who are naive to the intended
therapy.
• In such a case e.g. you cannot make a group (typically the group which
learned the skill first) unlearn a skill such as yoga and then act as a control in
the second phase of the study.
Crossover Designs
• Crossover designs -only for chronic diseases.

• Common cold may resolve itself within a short period of time; second
treatment not needed.

• Disadvantage -the potential for “carryover” effects, i.e., the treatment

administered during the first period may carry over into the second treatment
period.
Suppose patients are randomized to the treatment sequences AB and BA in a
crossover design:
Period #1 Period #2
Treatment A Treatment B
Treatment B Treatment A

If Treatment A is pharmacological, then it is possible that it can carry over into

the treatment B period for those patients randomized to the AB sequence.
 Bias Control: Blinding
• “Blinding," is a method of concealing knowledge of treatment
assignment as a means of reducing bias in reporting or measuring
outcome on the part of patients, those collecting the data, or those
analyzing study results.
• Blinding: Keeping the identity of treatment assignments masked
for:

Subject => Single-blind

Subject + Investigator => Double-blind

subject+ investigator+ analyser => triple blind

purpose to reduce bias

 Blinding
• When patients or investigators know the tr. they may
introduce their own prejudices about the effect of treatment
into the assessment of outcome.
• With two or more pharmaceutical agents, masking may be
achieved by ensuring that all treatments appear identical.
• If the objective is to evaluate a new drug in comparison with
no treatment, a placebo is used for the comparison group.
• A placebo is an inactive agent made to seem identical to the
active agent in terms of appearance and mode of
administration.
• The use of placebo is rare; in case of new surgical procedures,
it is more difficult (and ethically questionable) to apply sham
surgeries.
• masking in such settings may be limited to the individuals who
are assessing the outcome.
• in a clinical trial of eye surgery in which visual acuity is the
outcome, the technician measuring visual acuity would be
masked as to treatment assignment to avoid bias in
administration of the visual acuity test.
 Ethical principles
• INTRODUCTION
• Exploitation of human subjects during world war
two in Germany
• Nuremberg Code 1947 emphasizing consent for
participation in experimentation
• Universal Declaration of Human Rights (UNO),
1948 expressed concern about human maltreatment
• International Covenant on Civil and Political
Rights, 1966 stated
• “No one shall be subjected to torture or to cruel,
inhuman or degrading treatment or punishment …
particularly without his consent to medical or scientific
treatment”
Biomedical Ethics March 2006
 INTRODUCTION (Contd)
• Helsinki Declaration 1964, formulated by World
Medical Association, defined principles on use of
human subjects in medical research
• Policy Statement on Ethical Consideration involved in
Research on Human Subjects (ICMR) 1980
• Proposed International Guidelines for Biomedical
Research involving Human Subjects (WHO & CIOMS)
1982

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 INTRODUCTION (Contd)

• International Guidelines for Ethical Review in

Epidemiological Studies (Council for
International Organizations of Medical
Sciences) 1991
• International Ethical Guidelines for Biomedical
Research involving Human Research 1993

Biomedical Ethics March 2006

 General Principles
• Purpose should be to increase knowledge about
human condition vis a vis social & natural
environment
• Research should ensure well being and dignity of
the subject in achieving the objective without undue
risk
• Research must be evaluated objectively at each
stage of the proposal viz. design & experimentation,
results & their end use

Biomedical Ethics March 2006

 General Outline

• Essentiality of the proposal after considering all

the available data
• Voluntariness of the subject for participation.
• Non-exploitation by explaining all the dangers-
present as well as future.
• Privacy and confidentiality of the subject and the
data.
• Precaution and risk minimization during research
must be ensured.

Biomedical Ethics March 2006

 General Outline (Contd)
• Professional competence of the investigators is
essential.
• Accountability and transparency in research is
essential by making available all data for review.
• Maximization of public interest and of
distributive justice by ensuring that results are of
benefit to all human kind and not only to an
individual or a section of society.
• Institutional arrangement must ensure that all
personnel participating in research comply with
all the regulations and results, materials, data and
reports are properly preserved and archived.
Biomedical Ethics March 2006
 Ethical considerations
• If the physician feels that one treatment better than
another for a particular patient, he or she cannot randomly
assign a treatment.
• It is unethical not to treat a patient in a manner that the
physician believes is best.
• Thus, if the physician is convinced that one of the
treatments is better for the patient, the patient should not
be entered in the study, and if at any time during the study
there is a clear indication that one treatment is better,
randomization of patients should be stopped.
• To avoid termination of trials due to physician’s bias before
any statistical significance has been obtained, results of the
trial should be kept from the participating physicians until a
decision of whether or not to stop the trial has been
reached by an advisory committee.

Biomedical Ethics March 2006

 General Outline (Contd)

Results have to be in public domain by publication of

research in journals/reports etc. subject to rights of the
sponsors as per law.
• Totality of responsibility whereby investigators, sponsors,
institution and prescribers of the product are all
responsible for monitoring the efficacy and safety of the
product.
• Compliance of guidelines are mandatory on everyone
connected with research on humans.

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 Composition of Ethics Committee
• Chairperson (from outside the institution)
• 1-2 Basic Medical Scientists
• 1-2 Clinicians
• One legal expert or retired judge
• One Social Scientist/representative of an NGO
• One philosopher/ethicist/theologian
• One lay person from the community
• Member Secretary

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 Responsibilities of Ethics Committee-1

• To review all project proposals received for

experimentation on humans without bias and
objectively.
• Scientific soundness of the proposal must be ensured
first through review by Scientific Review committee.
• The committee should specify in writing the
authority under which it was established,
membership requirements, the terms of reference,
the quorum requirements etc.

Biomedical Ethics March 2006

 Responsibilities of Ethics Committee-2
• The committee must ensure dignity, rights and well being of
potential research participants.
• Ensure Universal ethical values and international scientific
standards expressed in terms of local community values &
customs. Evaluate the possible risk to the subjects with
proper justification, expected benefits and adequacy of
documentation.
• Ethical review should be done through formal meetings and
not through circulation of the proposals.

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 Informed Consent

• Participation in biomedical research is completely

voluntary and it is the responsibility of PI to explain this to
a potential subject.
• The consent form may be signed by the volunteer or his
legal guardian or parents in case of children and witnessed
by a person not related to the trial.
• The Ethics Committee can give a waiver if research
requires only collection of data from Subject’s records or
during an emergency in a trial which has been approved
earlier. In the latter case IEC must be informed after the
emergency is over.
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 Essential Information for Research Subjects-1
• Following information may be provided in the
language understandable by the subject:
– Aims and methods of research.
– Expected duration of participation.
– Benefits expected out of research to self or others.
– Any alternative procedures available to the subject
which may be equally good.
– Right to prevent use of his/her biological sample (DNA,
Cell line etc) at any time during the research.
– Extent to which confidentiality will be maintained and
anticipated consequences of breach of confidentiality.

Biomedical Ethics March 2006

 Compensation for Participation
• Subjects may be paid for their time spent and
actual cost of transport but should not be an
inducement for participation.
• If a guardian is giving consent, no remuneration
may be paid.
• If a subject is withdrawn from the trial due to
medical reasons, full benefit for participation may
be paid.
• If subject withdraws due to any other reason,
proportionate amount may be paid.

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 Special Groups as Research Subjects
• 1. Pregnant or nursing mothers: Not to be included
unless the object is to obtain new knowledge about fetus,
pregnancy and lactation and trials are designed to protect or
advance the health of such women or nursing infants.
Examples are:
– (a) to test efficacy and safety of a drug for reducing perinatal
transmission of HIV infection; trials for detecting fetal
abnormalities; conditions associated with or aggravated by
pregnancy.
– (b) Research related to MTP.
– (c) Research related to prenatal diagnostic techniques
limited to detection of fetal abnormalities or genetic
disorders.
Biomedical Ethics March 2006
 Special Groups as Research Subjects

• 2. Children: (a) Should not be involved unless the drug has

been tested in adults up to Phase III clinical trials or unless the
test agent is meant only for primary disease of children.
• (b) Parent or guardian has given consent.
• (c) Individual risk to the child must be weighed against
anticipated benefits to the society.
• (d) Child’s refusal to participate should be respected unless
there is no alternate therapy available and parent/guardian
has given consent.
• (e) The intended intervention is likely to be at least as
effective as the available alternate interventions.

Biomedical Ethics March 2006

 Special Groups as Research Subjects
• 3. Vulnerable groups: Individuals or communities invited
for research should be such that the burdens and benefits are
equally distributed in the society.
• Precautions: (a) Research on genetics should not lead to racial
inequalities. (b) Economically or socially weaker class should
not be used to benefit better off people. (c) Rights and
welfare of mentally challenged persons who are incapable of
giving informed consent must be protected. (d) Adequate
justification is required for prisoners, students, subordinates,
employees, service personnel etc who have reduced
autonomy.

Biomedical Ethics March 2006

 Compensation for Accidental Injury
• Subjects suffering physical injury as a result of their
participation in research are entitled to financial and
other assistance to compensate them for any
temporary or permanent disability or impairment. In
case of death, their dependents are entitled for
material compensation.
• Sponsor is obliged to agree for such compensation
before the start of research through adequate
insurance coverage.

Biomedical Ethics March 2006

 Observational studies
• A prospective cohort study is a cohort study that
follows over time a group of similar individuals (cohorts
) who differ with respect to certain factors under study,
to determine how these factors affect rates of a certain 
outcome. 

• For example, one might follow a cohort of middle-aged

truck drivers who vary in terms of smoking habits, to
test the hypothesis that the 20-year incidence rate of
lung cancer will be highest among heavy smokers,
followed by moderate smokers, and then nonsmokers.
• The prospective study is important for research on the 
etiology of diseases and disorders in humans because
for ethical reasons people cannot be deliberately
exposed to suspected risk factors in controlled
experiments.
• A retrospective cohort study, also called a historic cohort study,
generally means to take a look back at events that already have
taken place. For example, looking back at a patient's medical
history or lifestyle over a time.
• In Retrospective Cohort Study, all the events - exposure,
latent period, and subsequent outcome (ex. development of
disease) have already occurred in the past. We merely
collect the data now, and establish the risk of developing a
disease if exposed to a particular risk factor. On the other
hand, Prospective Cohort Study is conducted by starting
with two groups at the current point, and following up in
future for occurrence of disease, if any.

• In retrospective cohort studies, a risk ratio or odds ratio

 gives an assessment of relative risk.
• Advantages over prospective cohort studies- smaller scale,
less time to complete. 
• Another chief advantage is that retrospective studies are
better for analysing multiple outcomes.
• And one of the biggest benefits to a retrospective study in a
medical context is its ability to address rare diseases, which
would necessitate extremely large cohorts in prospective
studies
•  In such a study, diseased people have already been identified,
so retrospective studies are especially helpful in addressing
diseases of low incidence.
• Less expensive than prospective studies  because outcome
and exposure have already occurred, and the resources are
mainly directed at collection of data only. Additionally, it has
essentially all the benefits of a Cohort Study
Case control vs cohort
 Indications for cohort studies
• Evidence of association- fair
• Exposure rare-but incidence high
• Low attrition rate-stable & cooperative cohort
• Sufficient time & resource available
• Cohort free from effect under study
• Cohort Susceptible to exposure
• Both group comparable in all other respects influencing effect
• Diagnostic & eligibility criteria defined before start
 What is a clinical trial?
• A Clinical trial is defined as a prospective study comparing the effect and value
of intervention (s) against a control in human beings.

• Why are clinical trials necessary? Why not do all the tests on mice?
– Laboratory experiments are the paradigm (model of how something should be
done) of scientific study
– Several important limitations including generalization to human beings

Difficulties with studies on humans:

– Human subjects are not passive lab subjects
– Extraneous factors can’t be controlled
– Many important outcomes take years to develop (it is difficult to study humans
over a long course of time)
– Ethics of research into human health places appropriate restrictions on what can
be done

• Nevertheless, questions concerning human health can only be ultimately

answered by research on human beings.
• The history of clinical trials dates back to approximately 600 B.C. when Daniel of Judah
conducted what is probably the earliest recorded clinical trial. He compared the health effects of
the vegetarian diet with those of a royal Babylonian diet over a 10-day period. Many
deficiencies but-
• Clinical trials( Therapeutic trials) are conducted not only to decrease
morbidity and mortality but also to improve the methods and
procedures for diagnosis of a disease, to improve the quality of life of
patients during and after treatment, and to prevent disease.
• New drug development is a part of this effort, but other aspects include
integrating multiple treatment modalities, testing new combinations of
existing drugs or new dosing schedules and routes of administration,
assessing new screening tests, evaluating supportive care methods, and
teaching lifestyle changes .
• Community Trial (Syn: Prophylactic Trial):
This is an experiment in which the unit of allocation to receive a
preventive or therapeutic regimen is an entire community or political
subdivision. Examples include the trials of fluoridation of drinking water,
and of heart disease prevention in a country.

• Ethics: Experiment involving human subjects brings up new ethical

issuesBias: Experiment on intelligent subjects requires new measures of
control
 Available Study Designs

Randomised Controlled Trials

Design
Experimental
group –
Anticoagulants,
Number of 70
Patients with 100
Surviving > 1yr.20
stroke
Control Group – No
Anticoagulants,100

Percentages surviving in E and C and tests

of significance
 Superiority trials
• new treatment developed-clinicians ask themselves 2 questions:
• Firstly, is it better than (“superior to”) what they are using now?
• Secondly, if it’s not superior, is it as good as the old one (“non-
inferior”) and preferable for some other reason (eg, fewer side
effects or more affordable)?
• Aim -E superior to a control (C) treatment, the RCT is called a
superiority trial and the associated statistical test is a superiority
test. Significant result
• If non significant result, one cannot claim a better performance
of E over C, but neither can one claim that E is equally as good
as C- equivalence trial.
• In fact when E and C are not identical treatments, there will be
always some small difference ∆ in effects, and for each small
true difference one can establish a sample size such that, with
high probability, the null hypothesis ([H0]) of equal effect is
rejected.
 superiority clinical trials
• RCT -Gold Standard method for comparing treatment
effects.
• The majority of clinical trials aim to establish the
superiority of an intervention against an active control
or placebo on the basis of statistical significance of
difference.
• The smallest the expected difference between two
interventions, the highest the number of patients to be
included into the trial.
• But, how to interpret a non-significant result obtained
from such a superiority trial? Does this mean that the
interventions under study should be considered as
equivalent?.
• .
 Non-inferiority trials
• RCTs designed to show that the therapeutic
efficacy of a new therapy is not unacceptably
inferior to that of standard therapy are called
non inferiority trials.
• It is becoming difficult to develop more
powerful drugs, there is a trend to develop
trials where E not much inferior to C.
• Equivalence and non-inferiority trials should
be conceived, planned and applied, where
superiority trials not possible.
• But neither equivalence nor non-inferiority
definitively follow from superiority trials
exhibiting non-significant results.
 Non inferiority trials
• In a non-inferiority trial, we use only upper limit of two-sided 95%
CI.
• This corresponds to a one-sided 97.5% CI; unbounded at the left
side.
• This corresponds to a one-sided significance level of 0.025.
• Thus, while in superiority and equivalence tests, one performs
the significance testing at a two-sided 0.05 alpha level (which is,
in fact, a combination of two one-sided tests) a standard non-
inferiority test is performed at one-sided 0.025 level.
• Further, while in superiority trials it is still popular to use p-values
for the reporting of the results, in non-inferiority trials, it is
customary to use the (two-sided) 95% CI.

• It doesn’t mean treatment C to be superior to E. The interval of

non-inferiority is unbounded on the left side and is, therefore,
also referred to as the region of non-inferiority.
• Two methods are currently used to choose the non-
inferiority margin .
1. purely clinical grounds.
2. an indirect comparison with the ( putative) placebo
treatment
• The second approach could be further refined by
combining the clinical and statistical reasoning, resulting
in a value that is clinically acceptable and ensures the
superiority of E over placebo C
• These trials are not easy to design.
• An active control must be selected.
• Many weaknesses
no internal demonstration of assay sensitivity,
no single conservative analysis approach,
lack of protection from bias by blinding, and difficulty
in specifying the non inferiority margin M
 Non inferiority trials
• An analysis of the new treatment versus the placebo using data
from the non-inferiority trial and the active versus placebo-
controlled trials is needed.

• Non inferiority trials may sometimes be necessary when a

placebo group can not be ethically included, but it should be
recognized that the results of such trials are not as credible as
those from a superiority trial

• In non-inferiority trials, the choice of the maximum allowable

margin is crucial.
• The rationale to determine these limits require careful
consideration and should be appropriately described into the
special section of the protocol
• Non inferiority trials sometimes confused with equivalence
trials
 Equivalence trials
• An equivalence trial is designed to confirm the absence of a
meaningful difference between two treatments

• An equivalence trial is a clinical trial designed to evaluate

whether an experimental treatment E is similar to a
control treatment C(standard treatment), by an
appropriate definition of similarity.

• E may or may not actually be superior to C; often it is

assumed that E and C have equal effects—hence the
term ‘equivalence’ trial.

• A two-sided trial of similarity is referred to as an

‘equivalence’ trial and a one-sided trial as a ‘non-
inferiority’ trial
 Equivalence trials
• An equivalence trial would be relevant if the new therapy is
simpler, associated with fewer side-effects or less expensive, even
if it does not have a larger therapeutic effect than the control C.
• Specifying size of Δ not simple. Therefore Δ should be specified
very small to represent a clinically meaningful difference.
• Δ should be specified to no more than half the value used in a
superiority trial .
• Equivalence between the therapies would be demonstrated if
the confidence interval for the difference in effect between the
therapies turns out to lie entirely between −Δ and +Δ
• Further, for an equivalence trial, a significant result (p < 0.05)
means that the two treatments are equivalent, according the
definition of equivalence as defined clinically
• In case p [greater than or equal to] 0.05, corresponding to a 95%
CI that crosses one or both boundary values of the interval of
clinical equivalence, the two treatments cannot be called
equivalent.
• The purpose of an equivalence trial is to establish identical
effects of the therapies being compared. Complete
equivalent effects would mean a Δ-value of zero.
• This would mean division by zero; very large sample size.
• Therefore, the aim of an equivalence trial would be to
determine if the difference in effects between two
therapies lies within a specified small interval −Δ to +Δ.

• It is fundamentally impossible to prove that two

treatments have exactly equivalent effects. Equivalence
trials, therefore, aim to show that the effects differ by no
more than a specific amount. This tolerance is known as
the equivalence margin, and is often denoted by the
symbol Δ.
• In an equivalence trial, if the effects of the two
treatments differ by more than the equivalence margin in
either direction, then equivalence does not hold
 Design of Bioequivalence trials
• A bioequivalence trial compares the equivalence between a test
T and a reference drug R in terms of the rate and extent of drug
absorption.

• Area under the plasma concentration-time curve (AUC) and

maximum plasma concentration (Cmax) are the pharmacokinetic
parameters that determine the extent and rate of absorption.

• The experimental design of a bioequivalence study is usually a

crossover and rarely a parallel or a paired comparative.

• The statistical assessment of bioequivalence is based on the 90%

confidence interval for the ratio of the test mean to the reference
mean for AUC and Cmax
 Bioequivalence
• Most equivalence trials are bioequivalence trials that aim to compare a
generic drug with the original commercial drug, to show that they have
the "same" pharmacokinetic PK) profile, expressed by the most common
PK variables: Cmax, Cmin and AUC (area under the curve).
• Bioequivalence trials are true equivalence trials, but it is difficult to
imagine any trial comparing the clinical effects of an experimental
treatment and active control that would not more appropriately be
termed a non inferiority trial
• Bioequivalence is a term in pharmacokinetics used to assess the expected 
in vivo biological equivalence of two proprietary preparations of a drug.
• If two products are said to be bioequivalent it means that they would be
expected to be, for all intents and purposes, the same.
• Pharmaceutical equivalence implies the same amount of the same active
substance(s), in the same dosage form, for the same route of
administration and meeting the same or comparable standards."
 Design of Bioequivalence trials
• Types of bioequivalence:
1. Population bioequivalence - the formulations are equivalent
with respect to their underlying probability distributions; AUC
or CMAX distributions
2. Average bioequivalence - the formulations are equivalent with
respect to the means (medians) of their probability
distributions.
3. Individual bioequivalence - the formulations are equivalent for
a large proportion of individuals in the population. i.e., how
well do the AUC's and CMAX compare across patients?
• The sponsors generally require pharmaceutical companies to
establish that the test and reference formulations are average
bioequivalent. However, consumers often assume
bioequivalence same as individual bioequivalence, and that
switching formulations does not lead to any health problems.
Bioequivalence

A bioequivalency profile
comparison of 150 mg extended-
release bupropion as produced
by Impax Laboratories forTeva
 and Biovail for GlaxoSmithKline.
• Prescribability means that a patient is ready
to embark on a treatment regimen for the
first time, so that either the reference or test
formulations can be chosen.
• Switchability means that a patient, who
already has established a regimen on either
the reference or test formulation, can switch
to the other formulation without any
noticeable change in efficacy and safety.
• Prescribability requires that the test and
reference formulations are population
bioequivalent, whereas switchability
requires that the test and reference
formulations have individual bioequivalence
• Often the old process is time intensive and more costly. Finding
the new process not inferior to the old process gives sufficient
reason to replace it.
• In clinical trials, with patient and treatment variability, a new
treatment that performs within 10 to 20% of an old treatment is
often the margin used to be called non-inferior.
• Often the safety profile of the new treatment is superior to the
standard treatment, making the new treatment preferable even
though it is not superior in efficacy.
• Outcomes of a Non-inferiority Trial At the conclusion of a non-
inferiority trial, the confidence interval can be plotted and
examined on a chart showing the non-inferiority margin
representing the non-inferiority difference between X and Y.
• Several outcomes are possible, from superiority of the new
treatment. Note for this hypothesis test we are comparing (X –
Y) with the lower non-inferiority boundary.
• Switching Between Non-inferiority and Superiority
• An experiment might be easily designed to show non-inferiority.
• Through testing, the outcome actually might show a statistically significant
improvement for Y compared with X.
• The issue arises as to whether the experimenter is entitled to claim superiority
for Y over X, rather than merely the non-inferiority for which the trial was
planned.
• If the upper confidence bound is greater than the non-inferiority margin and
the lower confidence bound exceeds zero, a conclusion of superiority is
warranted.
• It might also be possible to support a non-inferiority conclusion in the case of
an experiment designed to show superiority. This conclusion can be made only
if both the hypothesis of superiority and the hypothesis of inferiority are
stated before the experiment.
• Summary
• The use of non-inferiority experimental designs is well established in
evaluating new clinical entities and devices in the biotech and pharmaceutical
industries. Adapting this technique for identifying processes and products as
non-inferior vs. equivalent within a pre specified non-inferiority margin can
provide more cost effective sampling and analysis when applied to statistical
quality control.
 δ is same as Δ

The choice of inferiority margin, Δ , affects the sample size calculation and the
conclusion of the study. A general rule of thumb is that this quantity must be
considerably smaller (1/2 or 1/3) than the minimal clinical difference we might
use to calculate sample size in a superiority trial.
• The null hypothesis in inferiority trials seems backwards, in a
sense, as this hypothesis is not 'null' at all.
• Instead, it states that the new treatment is worse than the
old by more than -Δ, where -Δ is the 'non-inferiority margin'.
The alternative hypothesis states that the difference in the
effect between the new and old interventions is less than -Δ
(Figure 1)
 Interim analysis
• If a treatment is particularly beneficial or harmful compared to the concurrent
placebo group while the study is on-going, the investigators are ethically
obliged to assess that difference using the data at hand and may terminate
the study earlier than planned.
• The term ‘interim analysis’ is used to describe an evaluation of the current
data from an ongoing trial, in which the primary research question is
addressed, and which has the potential for modifying the conduct of the
study, usually before the recruitment is complete.
• In addition to saving time and resources, such a design feature can reduce
study participants' exposure to the inferior treatment. However, when
repeated significance testing on accumulating data is done, some adjustment
of the usual hypothesis testing procedure must be made to maintain an
overall significance level.
• Sometimes interim analyses are equally spaced in terms of calendar time or
the information available from the data, but this assumption can be relaxed to
allow for unplanned or unequally spaced analyses, It is a tool used for
statistical purpose.
 Stopping rules
• The design of many clinical trials includes some strategy for early stopping
if an interim analysis reveals large differences between treatment groups.

• It is now standard for a randomized comparative trial (phase III study) to

have a design that allows for periodic interim analyses of the primary
endpoint both for efficacy and futility.
• The best method is the group sequential design for data-dependent
stopping, which is a frequentist statistical concept.

• Examples are provided for the O'Brien-Fleming boundaries to guide early

stopping for efficacy.

• Interim statistical analyses are presented to an independent Data Safety

and Monitoring Board, which uses the statistical findings as a guideline
rather than as a strict rule in making a recommendation on study
termination to the sponsor.
• Finally, some issues that may arise when data are released for early
presentation to the scientific community are considered.
 Stopping rules
• Clinical investigators view an improvement in PFS or DFS as a
legitimate early stopping criterion, and direct a DSMB to
consider these end points in their decision-making for early
closure of clinical trials.

• The DSMB has the important task of implementing predefined

early stopping rules.

• The clinical investigators and statisticians have therefore to

protect patients against undue toxicity, to offer patients superior
treatment once benefit is proven, and to ensure that the study
will yield interpretable data for future generations of patients.

• Early stopping rules that do not capture each of these

important elements may serve to undermine the clinical trial
effort.
 Significance level
• Armitage et al studied the problem of testing a normal mean with
known variance and set the significance level or type I error probability
for the trial to be 5%. If one interim analysis and one final analysis are
performed this error rises to 8%. If four interim analyses and a final
analysis are undertaken this figure is 14%. Similar figures can be
anticipated for other response types.

• There is a danger that multiple looks at data can lead to over-

interpretation of interim results Overall type I error rate applying
repeated significance tests at α = 5% to accumulating data

• Number of tests Error rate

• 1 0.05
• 2 0.08
• 3 0.11
 Why would we have messed up if we looked early on?
• Every time we look at the data and consider stopping, we
introduce the chance of falsely rejecting the null hypothesis.
• In other words, every time we look at the data, we have the
chance of a type 1 error.
• If we look at the data multiple times, and we use alpha of
0.05 as our criterion for significance, then we have a 5%
chance of stopping each time.
• Under the true null hypothesis and just 2 looks at the data,
then we “approximate” the error rates as:
– Probability stop at first look: 0.05
– Probability stop at second look: 0.95*0.05 = 0.0475
 Total probability of stopping  0.0975

5/8/2002 Clinical Trials in 20 Hours

 Group Sequential Designs:
(1) Traditional Stopping Boundaries

• Formalize stopping rules and keep error rates low.

• Heuristically, we set up a “statistical boundary” and stop if
it is crossed.
• Simplest case: perform interim tests at a very stringent
level of significance and then test at the ‘nominal’ level at
the end of the study if trial has not terminated early.
• Examples:
– Do two interim analyses and only stop if p < 0.01. Then
at end of trial, use nominal 0.05 rate. Total type 1
error rate = 0.07
– Do 5 interim analyses at 0.002 level. Then do final
analysis at 0.04. Total type 1 error rate = 0.05.

5/8/2002 Clinical Trials in 20 Hours

 Sequential design
• Sequential analysis was first developed by Abraham Wald with
Jacob Wolfowitz as a tool for more efficient industrial quality control
during World War II. Another early contribution to the method was made
by K.J. Arrow with D. Blackwell and M.A.Girsiick.
• One subject or a pair (matched control is added to each group at a time &
the cumulative results analyzed to; tr. effective, not effective, not
conclusive
• Sequence goes on until-effective/ not
• Otherwise trial done on one or more
• trial can be stopped midway if limited resources; objective to avoid
wastage
• Thus a conclusion may sometimes be reached at a much earlier stage than
would be possible with more classical hypothesis testing or estimation, at
consequently lower financial and/or human cost.
 Sequential designs
• In a classical fixed sample design, the focus is choosing the sample size to
discriminate between H0 and H1.
• A disadvantage of fixed sample design is that the same number of subjects will
always be used regardless of whether the true treatment effect is extremely
beneficial, marginal, or truly harmful relative to the control arm and often it is
difficult to justify because of ethical concerns and/or economic reasons.
• Thus, specific early termination procedures have been developed to allow
repeated statistical analyses to be performed on accumulating data and to stop
the trial as soon as the information is sufficient to conclude.
• However, repeated analyses inflate the false positive error to an unacceptable
level.
• To avoid this problem, many approaches of group sequential methods have
been developed.
• Substantial sample size reductions compared with the single-stage design is
possible not only in the case of clear efficacy but also in the case of complete
lack of efficacy of the new treatment. This feature provides an advantage in
utilization of patient resource.
•
• Group sequential stopping rules are often used as guidelines in the
monitoring of clinical trials in order to address the ethical and efficiency
issues inherent in human testing of a new treatment or preventive agent
for disease.
• Such stopping rules have been proposed based on a variety of different
criteria, both scientific (e.g., estimates of treatment effect) and statistical
(e.g., frequentist type I error, Bayesian posterior probabilities, stochastic
curtailment).
• It is easily shown, however, that a stopping rule based on one of those
criteria induces a stopping rule on all other criteria. Thus the basis used to
initially define a stopping rule is relatively unimportant so long as the
operating characteristics of the stopping rule are fully investigated.

• Fully sequential designs involve continuous examination of the

data
• A compromise between fully sequential and fixed sample sizedesign is a
group sequential design involving interim analyses
• In a randomized trial with two treatment groups, classical group
sequential testing is used in the following manner: If n subjects in
each group are available, an interim analysis is conducted on the
2n subjects.
• The statistical analysis is performed to compare the two groups,
and if the alternative hypothesis is accepted, the trial is
terminated. Otherwise, the trial continues for another 2n
subjects, with n subjects per group.
• The statistical analysis is performed again on the 4n subjects. If
the alternative is accepted, then the trial is terminated.
Otherwise, it continues with period evaluation until N of the 2n
subjects are available.

• A group sequential design provides detailed specifications for a

group sequential trial.
• In addition to the usual specifications, it provides the total
number of stages (the number of interim stages plus a final stage)
and a stopping criterion to reject, accept, or either reject or
accept the null hypothesis at each interim stage. It also provides
critical values and the sample size at each stage for the trial.
 Adaptive designs
• An adaptive trial design can be characterized as a trial, sequential in
nature, that makes use of the data collected throughout the process
to make decisions or modifications to that trial.
• This type of design should empower or optimize collected data, as
well as improve patient benefit-by
1. increase sample size if observed data suggest loss of power,
and
2. make adjustment to save type 1 error
• Although the study aimed at effect size (say 20%), the drug may be of
clinical interest when the effect size is somewhat smaller (say 15%).
• Investigators may wish to increase the sample size rather than carry
on with an underpowered trial when the accumulating data suggest
that the effect size is smaller than anticipated.
• An adaptive design clinical study- a design prospectively
planned, having scope for modification of one or more
specified aspects of the study design and hypotheses based
on interim analysis in the study.
 Case- control studies
. Case
• To identify factors that may contribute to a medical condition by
comparing subjects who have that condition/disease (the 'cases')
with patients who do not have the condition/disease but are
otherwise similar (the 'controls').
• Require less resources but provide less evidence for causal
inference than cohort studies.
• A study trying to show that people who smoke (the attribute) are
more likely to be diagnosed with lung cancer (the outcome),
the cases would be persons with lung cancer, the controls would
be persons without lung cancer (not necessarily healthy), and
some of each group would be smokers.
• If a larger proportion of the cases smoke than the controls, that
suggests, but does not conclusively show, that the hypothesis is
valid.
 Case- control studies
. Case
• To identify factors that may contribute to a medical condition by
comparing subjects who have that condition/disease (the 'cases')
with patients who do not have the condition/disease but are
otherwise similar (the 'controls').
• Require less resources but provide less evidence for causal
inference than cohort studies.
• A study trying to show that people who smoke (the attribute) are
more likely to be diagnosed with lung cancer (the outcome),
the cases would be persons with lung cancer, the controls would
be persons without lung cancer (not necessarily healthy), and
some of each group would be smokers.
• If a larger proportion of the cases smoke than the controls, that
suggests, but does not conclusively show, that the hypothesis is
valid.
• Control group selection
• Controls need not be in good health; inclusion of sick
people is sometimes appropriate, as the control
group should represent those at risk of becoming a
case. 
• Controls should come from the same population as
the cases, and their selection should be independent
of the exposures of interest.
• Controls can carry the same disease as the cases, but
of another grade/severity, therefore being different
from the outcome of interest.
• No. not necessarily same; Increasing the number of
controls above the number of cases, up to a ratio of
about 4 to 1, may be a cost-effective way to improve
the study.
 CASE-CONTROL STUDY
• In its simplest form, comparing a case series to a matched
control series.
• Possibly the first c-c study was by Whitehead in Broad Street
pump episode,1854 (Snow did not do a c-c study).
• First modern c-c study was Janet Lane-Claypon’s study of Breast
cancer and reproductive history in 1926.
• Four c-c studies implicating smoking and lung cancer appeared
in 1950.
• FEATURES OF CASE-CONTROL STUDIES
• 1. DIRECTIONALITY: Outcome to exposure
• 2. TIMING:Retrospective for exposure, but
case-ascertainment can be either retrospective or concurrent.
• 3. SAMPLING:Almost always on outcome, with matching of
controls to cases
•  A case-control study generally depends on the
collection of retrospective data- recall bias.
• Recall bias is the tendency of subjects to report
events in a manner that is different between
the two groups studied.
• People who have a disease may be more likely
to remember exposures more readily than
those without the disease.
• The opportunities to effectively use case-
control studies may expand as new ways of
characterizing exposure through the use of
biologic markers of exposure are developed,
which would reduce the problem of recall bias.
 Case-Control Studies

Results
Outcome Direction
Of
Present Absent Sampling
O
Yes a b
Exposure
No c d
E
Odds of exposure to getting disease=a/ (a +b)/ b/ (a +b)=a/b
Odds of no exposure in getting disease=c/( c +d)/ d/ (c +d)=c/d
What is the excessive risk conferred having relatives with breast cancer?
women (no relatives with breast cancer) 100
will develop breast cancer 7
odds of getting breast cancer : (7/100) / (93/100) = 7/93

women (mother with breast cancer) 100

will develop breast cancer 28
odds of getting breast cancer : (28/100) / (72/100) = 28/72

Excess risk (Odds ratio) : odds of cancer with affected relatives/

odds of cancer without affected relatives
= (28/72) / (7/93) = 5.2

Y 28 72 100
OR=28*93/7*72
N 7 93 100 =5.2
 Meta analysis
• A meta-analysis combines the results of several studies that
address a set of related research hypotheses.
• Done by identification of a common measure of effect size,
measuring average effect of a treatment.
• Resulting overall averages can be considered meta-effect
sizes, which are more powerful estimates of the true effect
size than those derived in a single study under a given single
set of assumptions and conditions

• Meta-analysis is ``... the statistical analysis of a large

collection of analysis results from individual studies
for the purpose of integrating the findings.''
(Glass 1976)
• Thus "meta-analysis“ gives a "weighted mean of
experimental results“; to determine average effect of
a given treatment.
• The meta analysis in effect combines all the research
on one topic into one large study with many
participants.
• The danger is that in combining a large set of
different studies the construct definitions can
become imprecise and the results difficult to
interpret meaningfully.
• Advantages-objectivity
• Disadvantages-understanding of & generalization of
data; the investigators may be biased in favor/
against of certain studies
 Measures of Effect Size
• Often want to combine estimates of effect of some treatment e.g. drug,
rehabilitation program, teaching method.

• Measure of effect size depends on problem and even customs of different fields of
research. (Hall et al. 1994)

• Near-replicate studies may use different scales of measurement. Need an index of

effect size that does not depend on arbitrary scaling of dependent variable.
(Hedges & Olkin 1985, p.6)

• Two scale-free indices are commonly used:

• The std. mean difference.

Most commonly used index of effect size.

• Product-moment correlation coefficient.

 Effect Sizes & Confidence Intervals
• Meta analysis reports findings in terms of effect sizes.  The effect size
provides information about how much change is evident across all studies
and for subsets of studies.
• There are many different types of effect size, but they fall into two main
types:
• standardized mean difference (e.g., Cohen's d or Hedges g) or
• correlation (e.g., Pearson's r)
• It is possible to convert one effect size into another, so each really just
offers a differently scaled measure of the strength of an effect or a
relationship.
• The standardised mean effect size is basically computed as the difference
score divided by the standard deviation of the scores.
• In meta-analysis, effect sizes should also be reported with:
• the number of studies and the number of effects used to create the
estimate.
• confidence intervals to help readers determine the consistency and
reliability of the mean estimated effect size.
 Effect Sizes Comparison
• Tests of statistical significance can also be conducted and on the effect
sizes.

• Different effect sizes are calculated for different constructs of interest, as

predetermined by the researchers based on what issues are of interest in
the research literature.

• Rules of thumb and comparisons with field-specific benchmarks can be

used to interpret effect sizes. 

• According to an arbitrary but commonly used interpretation of effect size

by Cohen (1988), a standardized mean effect size of 0 means no change,
negative effect sizes mean a negative change, with .2 a small change, .5 a
moderate change, and .8 a large charge

• Wolf (1986), on the other hand, suggests that .25 is weakly significant and
.50 is clinically significant.
• The first meta-analysis was performed by Karl Pearson in
1904, in an attempt to overcome the problem of reduced
statistical power in studies with small sample sizes; analyzing
the results from a group of studies can allow more accurate
data analysis
• meta-analysis is widely used in epidemiology and
evidence-based medicine today
• Meta-analysis has been used to give helpful insight into:
1. the overall effectiveness of interventions (e.g.,
psychotherapy, outdoor education),
2. the relative impact of independent variables (e.g., the effect
of different types of therapy), and
3. the strength of relationship between variables.
 Advantages of meta-analysis
• Deriving and statistical testing of overall
factors / effect size parameters in related
studies
• Generalization to the population of studies
• Ability to control for between study variation
• Including moderators to explain variation
• Higher statistical power to detect an effect
 Steps in a meta-analysis
• 1. Search of literature
• 2. Selection of studies (‘incorporation criteria’)
• Based on quality criteria, e.g. the requirement of randomization and
blinding in a clinical trial
• Selection of specific studies on a well-specified subject, e.g. the treatment
of breast cancer.
• Decide whether unpublished studies are included to avoid publication bias
(file drawer problem:
• 3. Decide which dependent variables or summary measures are allowed.
For instance:
• Differences (discrete data)
• Means (continuous data)
• Hedges g is a popular summary measure for continuous data that is
standardized in order to eliminate scale differences, but it incorporates an
index of variation between groups

• in which μt is the treatment mean, μc is the control mean, σ2 the pooled

variance
 Steps in a meta-analysis
• There are four basic steps to any good meta-analysis:
• Identification
• Selection
• Abstraction
• Analysis
• 1. Identification
• The first step in a meta-analysis is to find all of the pertinent
articles on your topic. Important sources of information for a
meta-analysis include:
• MEDLINE
• EMBASE
• CancerLit, AIDSLine, and ToxLine
• Index Medicus
• MEDLINE, the database of the National Library of Medicine indexes
approximately 4100 journals, dating from 1966 to the present.
• The European version of MEDLINE is called EMBASE, and is a
Dutch/English collaboration.
• Depending on the topic, it may be appropriate to search the more
specialized National Library of Medicine databases, such as CancerLit,
AIDSLine, and ToxLine
• The Cochrane Collaboration Controlled Trials Register, established in
1993, is a new and important source of studies for a meta-analysis.
• Available by subscription on CD-ROM or Web interface covers 160,000
trials including all controlled trials in the MEDLINE and EMBASE, Cochrane
Collaboration volunteers of thousands of journals not indexed by
MEDLINE or EMBASE.
• Index Medicus important to search for articles published before 1966
• there are other sources of "fugitive literature" that may be important for
the author of a meta-analysis (some of which may be found in the
Cochrane Controlled Trials Register :
unpublished studies, theses, drug company studies, nonindexed studies
 Selection
It is important to select the right ones! There are a variety of possible
inclusion (also called eligibility) criteria:
• Whether the study include enough information for analysis (i.e. standard
deviation or standard error in addition to point estimate)
• The study design (i.e. controlled trials only vs randomized controlled trials
only, especially for studies of therapy)
• The year of study, if technology or typical dosing changes (for example,
only include studies since 1984 on dyspepsia if you're interested in
helicobacter pylori)
• The dosage used in the study (to assure that an effective dose was used)
• The language of the article - you or a colleague have to be able to read it!
• The minimum sample size - very small studies may be unrepresentative
and/or not worth the effort
• The patient age (adults only, > 60 only, etc)
• The study setting (emergency department, outpatient, inpatient,field)
 Abstraction
Once an appropriate group of studies has been identified, we have to abstract
the relevant data from each study. There are many sources of potential
error in data abstraction:
• The article may be wrong due to typographical or copyediting errors
• Tables can be misinterpreted
• Errors can occur during your own data entry or abstraction process
A good meta-analysis will take some or all of the following steps to minimize
errors:
• Use 2 independent reviewers
• Use a 3rd reviewer or consensus meeting to resolve conflicts
• Train reviewers by practicing with several articles to "calibrate"
• Compare abstract and text to look for inconsistencies
• Use a standard form or database which constrains entries to the expected
range
• Report the results of the data abstraction, including the percentage
concordance or even a kappa statistic
• Control investigators’ bias
• assessment of study quality, choice of ‘gold standard’ in diagnostic studies,
blinding etc.
 analysis
• There are many issues and controversies in the analysis of
meta-analytic data. First, let's define some important terms:
• Homogeneity and heterogeneity.
•
The Q statistic, interpreted using a chi-square distribution, is
often used as a test of homogeneity
. 
• Fixed effects models consider only within-study variability.
• The assumption is that studies use identical methods,
patients, and measurements; that they should produce
identical results; and that differences are only due to within-
study variation.
• By using a fixed effects model, the researcher answers the
question: "Did the treatment produce benefit on average in
the studies at hand?“
• The Peto and Mantel-Haenszel odds ratios are both based
on a fixed effects model.
• Random effects models consider both between-
study and within-study variability.
• The assumption is that studies are a random
sample from the universe of all possible studies.
• With a random effects model, the researcher
answers the question: "Will the treatment
produce benefit ‘on average’?"
• The Der Simonian Laird statistic is based on a
random effects model.
• In general, if the studies are homogenous, the
researchers should use a fixed effects model &
in case of heterogeneity, do a random effects
analysis on all the studies & identify subgroup
differences.
• It is critical to have an explicit inclusion and exclusion
criteria:
– the broader the research domain, the more detailed they
tend to become
– developed iteratively as you interact with the literature
• To include or exclude low quality studies
– the findings of all studies are potentially in error
(methodological quality is a continuum, not a dichotomy)
– being too restrictive may restrict ability to generalize
– being too inclusive may weaken the confidence that can be
placed in the findings
– must strike a balance that is appropriate to your research
question
 The Logic of Meta Analysis
• Traditional methods of review focus on statistical
significance testing
• Significance testing is not well suited to this task
– highly dependent on sample size
– null finding does not carry to same “weight” as a
significant finding
• Meta-analysis changes the focus to the direction and
magnitude of the effects across studies
– Isn’t this what we are interested in anyway?
– Direction and magnitude represented by the effect size
Forms of Research Findings Suitable to Meta-
Analysis
• Central Tendency Research
• Pre-Post Contrasts
– growth rates
• Group Contrasts
– experimentally created groups
• comparison of outcomes between treatment and comparison
groups
– naturally occurring groups
• comparison of spatial abilities between boys and girls
• Association Between Variables
– measurement research
• validity generalization
– individual differences research
– prevalence rates
• correlation between personality constructs
 Effect Size: The Key to Meta-Analysis
• The effect size makes meta-analysis possible
– it is the “dependent variable”
– it standardizes findings across studies such that they can be directly
compared
• Any standardized index can be an “effect size” (e.g.,
standardized mean difference, correlation coefficient, odds-
ratio) as long as it meets the following
– is comparable across studies (generally requires standardization)
– represents the magnitude and direction of the relationship of interest
– is independent of sample size
• Different meta-analyses may use different effect size indices
 Strengths of Meta-Analysis
• Imposes a discipline on the process of summing up
research findings
• Represents findings in a more differentiated and
sophisticated manner than conventional reviews
• Capable of finding relationships across studies that
are obscured in other approaches
• Protects against over-interpreting differences across
studies
• Can handle a large numbers of studies (this would
overwhelm traditional approaches to review)
 Weaknesses
• Requires a good deal of effort
• Mechanical aspects don’t lend themselves to
capturing more qualitative distinctions between
studies
• “Apples and oranges”; comparability of studies is
often in the “eye of the beholder”
• Most meta-analyses include “blemished” studies
• Selection bias posses continual threat
– negative and null finding studies that you were unable to
find
– outcomes for which there were negative or null findings
that were not reported
• Analysis of between study differences is
fundamentally correlational
• On this plot, odds ratio of 1.00- no treatment effect.
• For most studies the odds ratio falls below 1.00, indicating
that patients treated with diuretics were less likely to develop
PE. For a few studies the odds ratio falls above 1.00, indicating
that patients treated with diuretics were more likely to
develop PE.
• A-diuretics beneficial, B-not
• The confidence interval reflects the precision of the estimate;
small studies wide confidence intervals and large-
• We are using the 95% confidence interval so the study will be
statistically significant (p < .05) if and only if the confidence
interval excludes the null value of 1.0.
• The bottom line on this plot is marked “Fixed” and shows the
combined effect for the 13 studies, using the fixed effect
model. To wit, the odds ratio is 0.67 with 95% confidence
interval of 0.56 to 0.80, z-value of -4.45 and p-value < 0.000.
 Effect size
Subject knowledge of 100 students-Normal
• Achievement on a test, researcher translates the results of a given study
into a unit of effect size.
• An effect size expresses the increase or decrease in achievement of the
experimental group in standard deviation units.
• Effect size computed for a specific study is 1.0. This means that the
average score for students in the experimental group is 1.0 standard
deviation higher than the average scores of students in the control group.
• In other words, a student at the 50th percentile in the experimental group
would be one standard deviation higher than a student at the 50th
percentile in the control group.
• A study that shows an effect size of 1.0 thus means a percentile gain of 34
points (one standard deviation above the mean encompasses 34 percent
of the scores) provided one can assume the average for the group is the
50th percentile. 
• Another way of interpreting effect size is to consider an effect size of .20
as small, an effect size of .50 as medium, and an effect size of .80 as large
(Cohen, 1988). While these are accepted rules of thumb, the importance
of an effect size magnitude is subjective 
• Chain -a collection of objects linked together in linear
fashion, or end to end, as the assemblage of atoms or
radicals in a chemical compound, or an assemblage of
individual bacterial cells.

• chain binomial model of an outbreak of an infectious

disease is one in which the outbreak is depicted as a series
of steps with a binomial statement of the probability of an
outcome at each step.
• The chain binomial model has been important in the
analysis of infectious disease spread in small groups
such as households.
• For example, the Reed–Frost model is a chain binomial
model where the number of new infectives at some
time t depends on the number of infectives and
susceptibles at time t – 1.
• Used to estimate epidemiological parameters for the
spread of such diseases as measles, smallpox, and
influenza.
• In many epidemic models the initial infection rate,
suitably defined, plays a major role in determining the
probability of an outbreak of a disease becoming a
major epidemic.
• Here we model the epidemic as a chain binomial
model and consider an approximate maximum
likelihood estimator of the infection rate.
• Sampling according to a simple stopping rule yields an
asymptotically normally distributed estimator which
may be computed during the course of an epidemic.
• A small simulation study suggests that the asymptotic
results applied to small samples yield accurate
confidence intervals.
 The Reed–Frost model
• Model first developed in 1927 and 1928 by Dr. L.J. Reed and Dr. W.H. Frost at the Johns
Hopkins School of Hygiene and Public Health. a chain binomial model
• One of the simplest epidemic models, often used as a template for other models,
• A classical discrete-time model describing the spread of an infectious disease over a closed
population,
– An S.I.R. Model (States Subdivided into): Susceptible, Infectious, Removed (Immune)
• A Model where Infection propagation is a Markov Chain where each state of infection lasts
only one time period, t
• The model is based on the following assumptions:
• 1. The infection is spread directly from infected individuals to others by an "adequate
contact" and in no other way.
• 2. Any non-immune individual in the group, after such contact with an infective individual in
a given period, will develop the infection and will be infectious to others only within the
following time period; in subsequent time periods, he is wholly and permanently immune.
• 3. Each individual has a fixed constant probability of coming into adequate contact with any
specified individual in the group within one time interval,
• 4. The individuals are wholly segregated from others outside the group. (It is a closed
population.)
• 5. These conditions remain constant during the epidemic.
 Reed frost model
• The following parameters are set initially:
• - Size of the population- Number of individuals already immune-
Number of cases (usually set at 1)- Probability of adequate
contact
• With this information, a simple formula allows the calculation of
how many individuals will be infected, and how many immune, in
the next time interval. This is repeated until the entire population
is immune, or no infective individuals remain. The model can
then be run repeatedly, adjusting the initial conditions, to see
how these affect the progression of the epidemic.
• The probability of adequate contact corresponds roughly with R0,
the basic reproduction number.
• The chain binomial models as a group assume that the
generations of infectives are separated by a significant
latent period and time of infectiousness.
• Thus, they are applicable to diseases in which cases or
groups of cases are separated in time well enough to
allow identification of successive generations of
infection.
• Let Ci, be the number of infectives and Si, the number of
susceptibles in the i th period for a population of size N,
C0 + S0 = N. The infectives in the i th period are removed
from the process in the i + 1 period, Ci +1 + Si + 1 = Si .
At time i + 1, some of the Si susceptibles succumb to the
disease and become infective, so that Ci+1+Si+1= Si
• The Reed-Frost model tries to take into account
that multiple contact between a susceptible and
infectives can produce only one new case.
• Let p be the probability of an adequate contact
between any two individuals; an adequate contact
between a susceptible and an infective in’ i’ period
converts the susceptible into a case in i + 1.
• Then q = 1 - p is the probability that two given
individuals do not have adequate contact. The
probability that a susceptible does not have
adequate contact with any
Ci
of the Ci cases in i is Qi+1= q
That is the same as the probability of not developing
the disease in i + 1period.
• Therefore the probability that a susceptible has at least one adequate contact
is shown in Equation (3); the expected number of cases in i + 1 is given by
Equation (4).
• Ci
• Pi+1=1-q (3)
• Ci
• E(Ci+1/Ci,Si) =Si(1-q) (4)
• Equation (4) is the expected number of cases in picking a binomial variable
from a population of Si susceptibles, with probability Pi + 1. The conditional
probability of obtaining Ci+ 1 = x cases given Ci and Si must then be
• x Si-x
• P(Ci+1=x/Si,Ci)=( Si) ( Pi+1) Qi+1
• ( x)
• The parameter Pi changes with i, thereby giving a chain-binomial process.
Note that the probabilities Qi+ 1 and Pi + 1 and the expected value [ Equation
(4)] are conditional on Ci and Si.
• As a simple example, we suppose that there are N individuals at the beginning,
and that at each time i(i = 0; 1; : : :), there are Ci cases and Si susceptibles.
• Each time period, the case exposes the susceptibles to risk of infection, and we
assume that the case recovers with immunity at the end of the time period.
Thus, at each time unit, the cases are the result of the new infections that
occurred the last time period.
• Thus, if the chance that one of the infectives will cause suffcient exposure is p,
then the chance of escaping infection from that infective is 1-p.
• Ci

• The chance of escaping infection by all the infectives is (1 -􀀀p) under an

assumption of independence. Ci
• Thus, each of the Si susceptibles has an infection risk of r = 1 -􀀀(1- p) , and if
we assume independence of the infection risk between susceptibles, we can
compute the distribution of the number of susceptibles infected using a
binomial distribution with Si trials, each
Ci
with success probability r = 1-(1-p) . This is the Reed-Frost model.
• A simple example will help clarify how the Reed-Frost model works. Consider
a simple household with N = 4 individuals, beginning with one single case at
the beginning (C0 = 1), with everyone else susceptible (S0 = 3). Assume the
infection risk is p for one susceptible and one infective; the risk that a
susceptible will be infected in the first time
C0 1
• period is 1 − (1 − p) = 1 − (1 − p) = p. There are four possible outcomes, and
the binomial distribution reveals that the chance of zero infections is P(C1 = 0)
= (1 − p) 3 , P(C1 = 1) = 3p(1 − p) 2 , P(C1 = 2) = 3p 2 (1 − p), and of all being
infected P(C1 = 3) = p 3 .
• If all the individuals are infected, or none are infected, then the epidemic
ends because there are no more susceptibles or because there are no more
infectives, and in either case, C2 = 0.
• Let us consider now what happens if we had C1 = 1. At time 1, we have C1 = 1
and S1 = N −C0−C1 = 2.
• The risk for each susceptible is 1−(1−p) C1 = 1−(1−p) 1 = p, and so the binomial
distribution (with S1 = 2 trials) reveals that P(C2 = 0|C1 = 1) = (1−p) 2 , P(C2 =
1|C1 = 1) = 2p(1−p), and P(C2 = 2|C1 = 1) = p 2 . In the case that none or both
of the susceptibles are infected, the epidemic ends; when only one is infected,
we have C2 = 1 and S2 = 1. The risk of infection is p for the one susceptible, so
P(C3 = 1|C2 = 1, C1 = 1) = p and P(C3 = 0|C2 = 1, C1 = 1) = 1 − p. In either case,
the epidemic ends.
• Finally, to finish the analysis, we must look at what happens when C1 = 2.
Here, we have two infectives and one susceptible, and the risk for the
susceptible is r = 1 − (1 − p) 2 . With only one susceptible, the binomial
distribution for the number of new infections just reduces to a single Bernoulli
trial with success probability 1 − (1 − p) 2 . The probability of an infection is
P(C2 = 1|C1 = 2) = 1 − (1 − p) 2 , and P(C2 = 0|C1 = 2) = (1 − p) 2 ; in either
case, the epidemic ends, either because we run out of susceptibles, or because
there are no more cases.
• The probability that a susceptible has at least one adequate contact is shown in
Equation (3); the expected number of cases in i + 1 is given by Equation (4).
ci
• Pi+1=1-q -- (3)
ci
• E{Ci+1/Ci,Si} =Si(1-q ) ---- ( 4)

• Equation (4) is the expected number of cases in picking a binomial variable from a
population of Si susceptibles, with probability Pi +1. The conditional probability of
obtaining
• Ci+1= x cases given Ci and Si must then be
x si-x
• equation (5): P[Ci+1=x/ Ci.Si]= (Si) Pi+1 Qi+1
(x
• The parameter Pi, changes with i, thereby giving a chain-binomial
process.
• Note that the probabilities Qi+ 1 and Pi +1 and the expected values are conditional on
Ci and Si.
• Aside from the question of independence, it seems likely that the number of physically
possible contacts of one susceptible is not necessarily equal to Ci;for large C, it is
certainly less.
• On the other hand if C, is small as in household epidemics, the number of physically
possible contacts could be close to C, and the Reed-Frost model might then be close
though not necessarily exact.
• A branching process is a Markov process that models a
population in which each individual in generation n produces
some random number of individuals in generation n + 1,
according to a fixed probability distribution that does not vary
from individual to individual.
• Branching processes are used to model reproduction; for
example, the individuals might correspond to bacteria, each of
which generates 0, 1, or 2 offspring with some probability in a
single time unit.

• A central question in the theory of branching processes is the

probability of ultimate extinction, where no individuals exist after
some finite number of generations.
• It is not hard to show that, starting with one individual in
generation zero, the expected size of generation n equals μ ⁿ
where μ is the expected number of children of each individual.
• μ is the expected number of children of each
individual.
• If μ is less than 1, then the expected number of
individuals goes rapidly to zero, which implies ultimate
extinction with probability 1 by Markov's inequality.
• Alternatively, if μ is greater than 1, then the
probability of ultimate extinction is less than 1 (but not
necessarily zero; consider a process where each
individual either dies without issue or has 100 children
with equal probability).
• If μ is equal to 1, then ultimate extinction occurs with
probability 1 unless each individual always has exactly
one child.

• In theoretical ecology, the parameter μ of a branching

process is called the basic reproductive rate
 Spatial models
• A class of stochastic process important as models in
genetics and population biology, chemical kinetics,
and filtering.
• The basic idea is that there are a number of objects,
often called particles, which, in some random
fashion, reproduce ("branch") and die out; they can
be of multiple types and occupy differing 
spatial locations.
• They can pursue their trajectories and their
biographies either independently, or with some kind
of statistical dependence across particles.
• Let’s start by considering a random variable X. If possible values of X are non
negative integers, then for
• pi = P (X = i), the sequence (pi , i ≥ 0) denotes the distribution of X, and E[X] = ∑
ipi
i≥0
• In the Galton-Watson Branching Process (GWBP) model the parameter is a
probability distribution (p0 , p1 , ...), taken on by a random variable ξ. For the
GWBP model we have the following rule.

• Branching Rule: Each individual has a random number of children in the next
generation. These random variables are independent copies of ξ and have a
distribution (pi ).

• Let us now review some standard results about branching processes. For
simplicity let µ denote E[ξ] and Let Zn denote the number of individuals in the
nth generation. By default, we set Z0 = 1, and also exclude the case when ξ is a
constant.

• Notice that a branching process may either become extinct or survive forever.
We are interested under what conditions and with what probabilities these
events occur.
 Application
• Extinction Probability for  Queues: 

•   A customer arrives at an empty server and immediately goes for service initiating a busy period.
During that service period, other customers may arrive and if so they wait for service.
•    The server continues to be busy till the last waiting customer completes service which indicates
the end of a busy period. An interesting question is whether the busy periods are bound to
terminate at some point ? Are they ? 

• Do busy periods  continue forever?  Or do such  queues come to  an end sooner or later?If so, how 

?
• Slow  Traffic (ξ≤1)
•  Steady state solutions exist and the probability of extinction  equals 1. (Busy periods are bound to
terminate with probability 1.  

• Heavy  Traffic  ξ >1

• Steady state solutions do not exist, and such queues can be characterized by their probability of
extinction.
• Steady state solutions exist if the traffic rate ξ<1

• What if  too many customers rush in, and/or the  service  rate is slow (ξ >1) ? How to characterize

such queues ?  =
Branching processes are a central tool in outbreak analyses
A standard Branching Process (BP) is a population model in
which each individual independently generates a number of
offspring. This number is randomly selected from a common
probability distribution.
Some of results in the rich theory of Branching Processes are
useful for studying the control of outbreaks of an infectious
disease.
In disease transmission a BP is used to approximate the
population dynamics of infectives, while the depletion of
susceptibles remains negligible.

This applies during the early stages of an outbreak initiated

by an imported infection and for the entire outbreak when
the outbreak is minor.
122
• A branching process starts with one individual in generation 0.
This individual produces a random number of individuals for
generation 1, the number distributed according to a
probability law G.
• Each individual in generation 1 and all subsequent
generations produces offspring independently according to
the law G.
• The process can be studied generation by generation
focussing on the (random) numbers in each generation and on
issues of population growth and extinction.
• If generation times are assumed to be variable, however, the
generations soon overlap in time and then properties such as
"total numbers at time t" are of interest.
• Such a process is usually referred to as the "age-dependent
branching process". (There are also the more general models
of Moyal and Jagers, where many of the independence
assumptions are dispensed with.)
 Important components
• Most time series patterns can be described in
terms of two basic classes of components:
trend and seasonality

For example, sales of a company

can rapidly grow over years but
they still follow consistent
seasonal patterns (e.g., as much
as 25% of yearly sales each year
are made in December, whereas
only 4% in August). monthly
international airline passenger
totals in twelve consecutive
years from 1949 to 1960 show a
consistent trend.
 Time series analysis
• If you plot the airline passenger totals from 1949 t0 1960
months by, you may find almost linear trend, indicating that
the airline industry enjoyed a steady growth .

• At the same time, the monthly figures will follow an almost

identical pattern each year (e.g., more people travel during
holidays than during any other time of the year).
• You may also notice that amplitude of the seasonal changes
increases with the overall trend . This pattern is called
multiplicative seasonality and indicates that the relative
amplitude of seasonal changes is constant over time, thus it is
related to the trend
• SECULAR TREND The smooth long-term direction of a time series.
• CYCLICAL VARIATION The rise and fall of a time series over periods
longer than one year.
• SEASONAL VARIATION Patterns of change in a time series within a year.
These patterns tend to repeat themselves each year.
• Time series data consist of a systematic pattern (usually a set of identifiable
components) and random noise (error) which usually makes the pattern
difficult to identify.
• Techniques involve some form of filtering out noise in order to make the
pattern more salient.
• Identifying Patterns in Time Series Data
• Systematic pattern and random noise
• Two general aspects of time series patterns
• Trend Analysis
• Analysis of Seasonality
• Let T= trend, I=seasonal effect, C=cyclical, E= random
• The idea is to create separate models for these four elements and then
combine them, either additively
• Xt = Tt + It + Ct + Et

• or multiplicatively

• Xt = Tt · It · Ct · Et .
• Cyclical Variation
• The second component of a time series is cyclical variation consisting of a period of
prosperity followed by periods of recession, depression, and then recovery with no fixed
duration of the cycle –more than 1 year.
• Employment, production, the S&P/TSX Composite Index, and many other
business and economic series are below the long-term trend lines or
Conversely, in good periods they are above their long-term trend lines.
• Seasonal Variation
• The third component of a time series is the seasonal component. Many sales, production,
and other series fluctuate with the seasons. The unit of time reported is either quarterly or
monthly.
• Irregular Variation
• Many analysts prefer to subdivide the irregular variation into episodic and residual
variations.
• Episodic fluctuations are unpredictable, but they can be identified. The initial impact on
the economy of a major strike or a war can be identified, but a strike or war cannot be
predicted.
• Smoothing data removes random variation and shows trends
cyclic and seasonal components
• Two methods
• 1. Averaging Methods
2.Exponential Smoothing Methods
1. Taking averages is the simplest way to smooth data
The mean is not a good estimator when there are trends
Income of a PC manufacturer between 1985
and 1994.
• Yr Income
1985 46.163
1986 46.998
1987 47.816
1988 48.311
1989 48.758
1990 49.164
1991 49.548
1992 48.915 we can not use mean to forecast
1993 50.315 different estimates if there is trend
1994 50.768
 Taking a moving average is a smoothing
process
• Supplier $ Error Error Squared

• --------------------------------------------------------------------------------
•
•
An alternative way to summarize the past data is to compute
1 9 -1 1
• 2 8 -2 4 the mean of successive smaller sets of numbers of past data
• 3 9 -1 1 as follows ; taking 3 as the set
• 4 12 2 4
• 5 9 -1 1 the average of the first 3 numbers is:  (9 + 8 + 9) / 3 = 8.667 ;
• 6 12 2 4 smoothing process is continued by advancing one period and
• 7 11 1 1
• 8 7 -3 9 calculating the next average of three numbers, dropping the
• 9 13 3 9 first number.
• 10 9 -1 1
• 11 11 1 1
• 12 10 0 0
• Mean=10

• The SSE = 36 and the MSE = 36/12 = 3.

• Supplier $ MA Error Error squared
• --------------------------------------------------------------------------------
•
• 1 9
• 2 8 8.667 - 0.333 .111
• 3 9 9.667 -0.333 .111
• 4 12 10.00 2.00 4.00
• 5 9 11.000 -2.000 4.00
• 6 12 10.667 1.333 1.77
• 7 11 10.000 1.00 1.00
• 8 7 10.333 -4.667 21.78
• 9 13 9.667 3.333 11.11
• 10 9 11.00 -2.00 4.00
• 11 11 10.000 1.0 0 1.00
• 12 10
• M=10
• The MSE = 2.018 as compared to 3 in the previous case
 Time series
• Model
• observations close together in time -more closely related than
observations further apart.
• Time series models use natural one-way ordering of time so that values
in a series for a given time will be expressed as deriving from past values.
• Autocorrelation
• Is the correlation between members of a time series of observations,
such as weekly share prices or interest rates, and the same values at a
fixed time interval later.
• More technically, autocorrelation occurs when residual error terms from
observations of the same variable at different times are correlated
(related).
• It is the same as calculating the correlation between two different time
series, except that the same time series is used twice - once in its original
form and once lagged one or more time periods.
The term can also be referred to as "lagged correlation" or "serial
correlation".
 Centered Moving Average

• To compute the average of the first 3 time periods,

place the average in the middle of the time interval
in front of period 2. Where to place the first moving
average when M = 4? Technically, the Moving
Average would fall at t = 2.5, 3.5, ...
• To avoid this problem we smooth the MA's using M =
2 and put the value in front of t=2. 5, 3.5,--.In the
next step we find the averages of these values-- Thus
we smooth the smoothed values
• Period Value MA Centered

• --------------------------------------------------------------------------------
•
• 1 9 p=4 p=2
• 1.5
• 2 8
• 2.5 9.5
• 3 9 9.5
• 3.5 9.5 9.75
• 4 12 10.0 10.062
• 4.5 10.5 10.375
• 5 9 10.75
• 55 11.0
• 6 12
• 6.5
• 7 9
 Double Moving Averages for a Linear Trend
Process
• Unfortunately, neither the mean of all data nor the moving
average of the most recent M values, when used as forecasts
for the next period, are able to cope with a significant trend.
There exists a variation on the MA procedure that often does
a better job of handling trend.
• It is called Double Moving Averages for a  Linear Trend
Process. It calculates a second moving average from the
original moving average, using the same value for M. As soon
as both single and double moving averages are available, a
computer routine uses these averages to compute a slope and
intercept, and then forecasts one or more periods ahead
• Linear Trend
• The long-term trend of many business series, such as sales, exports, and
production, often approximates a straight line. If so, the equation to
describe this growth is: Yˊ =a+bt where
• Y' is the projected value of the Y variable for a selected value of t.
• a is the Y-intercept; the estimated value of Y when t =0 and b is the slope
of the line, or the average change in Y' for each change of one unit in t.
• t is any value of time that is selected.
• To illustrate the meaning of Y', a, b, and t in a time-series problem, a line
may be drawn to sales data of a company in first table to represent the
typical trend of sales.
• a and b needs to be estimated, may be by least squares method.
 Uses of time series
• Economic Forecasting
• Sales Forecasting
• Budgetary Analysis
• Stock Market Analysis
• Yield Projections
• Process and Quality Control
• Inventory Studies
• Workload Projections
• Utility Studies
• Census Analysis
and many
 Unemployment data
autocorrelation

• When computed, the resulting number can range from +1 to -1. An

autocorrelation of +1 represents perfect positive correlation (i.e. an
increase seen in one time series will lead to a proportionate increase in
the other time series), while a value of -1 represents perfect negative
correlation (i.e. an increase seen in one time series results in a
proportionate decrease in the other time series).

• Used to detect cyclic activity within the market

;used to predict future strength of security

• This value can be useful for computing for security analysis. For example, if
you know a stock historically has a high positive autocorrelation value and
you witnessed the stock making solid gains over the past several days, you
might reasonably expect the movements over the upcoming several days
(the leading time series) to match those of the lagging time series and
to move upwards.
• Time series analysis comprises methods that attempt to understand such
time series, often either to understand the underlying context of the data
points (Where did they come from? What generated them?), or to make
forecasts (predictions).
• Time series forecasting is the use of a model to forecast future events
based on known past events: to forecast future data points before they are
measured
• Two main goals-
1. Identifying nature of the sequence

2. Forecasting (future values ) of time series

• Both require pattern recognition and its formal description.

• Once the pattern is established, we can interpret and integrate it with other data
(i.e., use it in our theory of the investigated phenomenon, e.g., sesonal
commodity prices).
• Regardless of the depth of our understanding and the validity of our
interpretation (theory) of the phenomenon, we can extrapolate the identified
pattern to predict future events.
 Models
• Models for time series data can have many forms and represent different
stochastic processes. When modeling variations in the level of a process,
three broad classes of practical importance are the

• autoregressive (AR) models, the integrated (I) models, and the

moving average (MA) models.

• These three classes depend linearly on previous data points. Combinations

of these ideas produce autoregressive moving average (ARMA) and
autoregressive integrated moving average (ARIMA) models. The
autoregressive fractionally integrated moving average (ARFIMA) model
generalizes the former three

• Non-linear dependence of the level of a series on previous data points is

of interest, partly because of the possibility of producing a chaotic time
series. Empirical investigations can indicate the advantage of using
predictions derived from non-linear models, over those from linear
models.
 Autoregressive model
• The general representation of an autoregressive model, well-known as AR(p), is

where the term εt is the source of randomness and is called white noise. It is assumed
to have the following characteristics:
• 1.
• 2.
• 3.
• With these assumptions, the process is specified up to second-order moments
and, subject to conditions on the coefficients, may be .
• If the noise also has a normal distribution, it is called normal white noise (denoted
here by Normal-WN):
•
• In this case the AR process may be strictly stationary, again subject to conditions
on the coefficients
 Trend Analysis
• There are no proven "automatic" techniques to
identify trend components in the time series
data; however, as long as the trend is
monotonous (consistently increasing or
decreasing) that part of data analysis is
typically not very difficult.
• If the time series data contain considerable
error, then the first step in the process of trend
identification is smoothing
• Smoothing.
• Some form of local averaging of data such that the
nonsystematic components of individual observations cancel
each other out.

• The most common technique is moving average .

• Medians can be used instead of means.

• Its results are less biased by outliers due to measurement

errors, median smoothing produces smoother and reliable
average.

• In the relatively less common cases when the measurement

error is very large, the distance weighted least squares
smoothing or negative exponentially weighted smoothing
techniques can be used.
• All those methods will filter out the noise and convert the data
into a smooth curve that is relatively unbiased by outliers .
• Fitting a function. Many monotonous time
series data can be adequately approximated
by a linear function; if there is a clear
monotonous nonlinear component, the data
first need to be transformed to remove the
nonlinearity. Usually a logarithmic,
exponential, or (less often) polynomial
function can be used.
• Examining correllograms
• While examining correllograms one should keep in
mind that autocorrelations for consecutive lags are
formally dependent.
• If the first element is closely related to the second,
and the second to the third, then the first element
must also be somewhat related to the third one, etc.
• This implies that the pattern of serial dependencies
can change considerably after removing the first
order auto correlation (i.e., after differencing the
series with a lag of 1).
•
 EXPONENTIAL SMOOTHING
• Exponential smoothing has become very popular as a
forecasting method for a wide variety of time series data.
• Historically, the method was independently developed by
Brown and Holt.
• Brown worked for the US Navy during World War II, where his
assignment was to design a tracking system for fire-control
information to compute the location of submarines.
• Later, he applied this technique to the forecasting of demand
for spare parts (an inventory control problem).
• Holt developed exponential smoothing models for constant
processes, processes with linear trends, and for seasonal data.
•
 Deseasonalising data
• Finding seasonal effect seasonal index
• Ratio to moving average approach
H=g/eX100
• To get an accurate estimate for the seasonal index, we compute
the average of the first period of the cycle, and the second
period, etc, and divide each by the overall average. The formula
for computing seasonal factors is:
• Si = Di/D,
• where:
Si = the seasonal index for ith period,
Di = the average values of ith period,
D = grand average,
i = the ith seasonal period of the cycle.
• A seasonal index of 1.00 for a particular month indicates that the
expected value of that month is 1/12 of the overall average.
• A seasonal index of 1.25 indicates that the expected value for
that month is 25% greater than 1/12 of the overall average.
• A seasonal index of 80 indicates that the expected value for that
month is 20% less than 1/12 of the overall average
• Now let us try to understand the measurement of seasonal variation by using
the Ratio-to-Moving Average method.
• This technique provides an index to measure the degree of the Seasonal
Variation in a time series. The index is based on a mean of 100, with the
degree of seasonality measured by variations away from the base.
• For example if we observe the hotel rentals in a winter resort, we find that the
winter quarter index is 124. The value 124 indicates that 124 percent of the
average quarterly rental occur in winter. If the hotel management records 1436
rentals for the whole of last year, then the average quarterly rental would be
359 (1436/4). As the winter-quarter index is 124, we estimate the no. of winter
rentals as follows:
• 359*(124/100)=445;
• Here, 359 is the average quarterly rental. 124 is the winter-quarter index. 445
the seasonalized spring-quarter rental.
• This method is also called the percentage moving average method. In this
method, the original data values in the time-series are expressed as
percentages of moving averages. The steps and the tabulations are given
below.
• Steps
• 1. Find the centered 12 monthly (or 4 quarterly) moving averages of the original data
values in the time-series.
• 2. Express each original data value of the time-series as a percentage of the
corresponding centered moving average values obtained in step(1).In other words, in a
multiplicative time-series model, we get(Original data values)/(Trend values) *100 =
(T*C*S*I)/(T*C)*100 = (S*I) *100. This implies that the ratio–to-moving average
represents the seasonal and irregular components.
• 3. Arrange these percentages according to months or quarter of given years. Find the
averages over all months or quarters of the given years.
• 4. If the sum of these indices is not 1200(or 400 for quarterly figures), multiply then by
a correction factor = 1200/ (sum of monthly indices). Otherwise, the 12 monthly
averages will be considered as seasonal indices.
• Let us calculate the seasonal index by the ratio-to-moving average method from the
following data:
• Year/ Quarters
I II III IV
• 1996 75 60 53 59
• 1997 86 65 63 80
• 1998 90 72 66 85
• 1999 100 78 72 93
• Year (Y) MA4 MA= T Ratio MA (%)= (Y)/ (T)*100
• 1996 75 MA2 ratio to ma
60
62
54 63.38 85.21
64.75
59 65.38 90.25
66
86
1997 65
68.25
63
60
90
72
1998 66
85
100
78
72
93
Yrs/ qr i ii iii iV

1996 85.21 90.25

1997 128.12 91.71 85,13 106.14

1998

1999

Sesonal

Adj seas
91.77

Now the total of seasonal averages is 299.14. Therefore the corresponding

correction factor would be 300/299.14 = 1.0028. Each seasonal average is
multiplied by the correction factor 1.0028 to get the adjusted seasonal indices
as shown in the above table.