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Forecasting South African Gold Sales: The Box-Jenkins Methodology

Author

Listed:
  • Johannes Tshepiso Tsoku

    (North West University)

  • Nonofo Phokontsi

    (North West University)

  • Daniel Metsileng

    (Department of Health)

Abstract

The study deals with Box-Jenkins Methodology to forecast South African gold sales. For a resource economy like South Africa where metals and minerals account for a high proportion of GDP and export earnings, the decline in gold sales is very disturbing. Box-Jenkins time series technique was used to perform time series analysis of monthly gold sales for the period January 2000 to June 2013 with the following steps: model identification, model estimation, diagnostic checking and forecasting. Furthermore, the prediction accuracy is tested using mean absolute percentage error (MAPE). From the analysis, a seasonal ARIMA(4,1,4)×(0,1,1)12 was found to be the ?best fit model? with an MAPE value of 11% indicating that the model is fit to be used to predict or forecast future gold sales for South Africa. In addition, the forecast values show that there will be a decrease in the overall gold sales for the first six months of 2014. It is hoped that the study will help the public and private sectors to understand the gold sales or output scenario and later plan the gold mining activities in South Africa. Furthermore, it is hoped that this research paper has demonstrated the significance of Box-Jenkins technique for this area of research and that they will be applied in the future.

Suggested Citation

  • Johannes Tshepiso Tsoku & Nonofo Phokontsi & Daniel Metsileng, 2015. "Forecasting South African Gold Sales: The Box-Jenkins Methodology," Proceedings of International Academic Conferences 2704589, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iacpro:2704589
    as

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    File URL: https://iises.net/proceedings/18th-international-academic-conference-london/table-of-content/detail?cid=27&iid=131&rid=4589
    File Function: First version, 2015
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    References listed on IDEAS

    as
    1. Goh Bee Hua & Teo Ho Pin, 2000. "Forecasting construction industry demand, price and productivity in Singapore: the Box-Jenkins approach," Construction Management and Economics, Taylor & Francis Journals, vol. 18(5), pages 607-618.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Gold sales; ARIMA; Box-Jenkins; GDP; MAPE;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C19 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Other
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General

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