The GM(1,1) Model Optimized by Using Translation Transformation Method and Its Application of Rural Residents’ Consumption in China

Abstract

AbstractConventional GM(1,1) model shows some limitations which affect directly to the model applicability as well as prediction accuracy. In order to improve the disadvantages existing in the original grey model, the authors analyze the translation transformation approach to optimize the raw sequence for grey modeling. This paper mainly carries on the proof of the existence of translation transformation from the perspective of smooth ratio and gives the method to solve the best step size of translation transformation. Then, the authors applied the grey models optimized by translation transformation to analyze the problem of the consumption of rural residents in China. As a result, the authors find GM(1,1) model optimized by translation transformation has characteristics of higher accuracy and simple calculation process and an important practical application in residents consumption.