Application of time series based prediction model to forecast per capita disposable income

Time series analysis is one of the major prediction techniques for forecasting of time dependent variables. These days the time series analysis is applicable to a variety of applications. In this work the time series analysis technique using ARIMA model is applied on per capita disposable income for future forecasting. Per capita disposable income is the average available money per person after income taxes have been accounted for. It is an indicator of the overall state of an economy. Forecasting of per capita disposable income is necessary as it may help government assess country's economic condition in comparison with the economy of other countries of the world. Forecasting per capita disposable income may also help assess inflation and financial critical situation. The results obtained from this work can be used by the planning commission of a country to formulate future policies and plans.