Order of integration


In statistics, the order of integration, denoted I, of a time series is a summary statistic, which reports the minimum number of differences required to obtain a covariance-stationary series.
The order of integration is a key concept in time series analysis, particularly when dealing with non-stationary data that exhibits trends or other forms of non-stationarity.

Integration of order ''d''

A time series is integrated of order d if
is a stationary process, where is the lag operator and is the first difference, i.e.
In other words, a process is integrated to order d if taking repeated differences d times yields a stationary process.
In particular, if a series is integrated of order 0, then is stationary.

Constructing an integrated series

An I process can be constructed by summing an I process:
  • Suppose is I
  • Now construct a series
  • Show that Z is I by observing its first-differences are I: