Reference Work Entry

International Encyclopedia of Statistical Science

pp 527-534

Date:

Forecasting Principles

  • Kesten C. GreenAffiliated withUniversity of South Australia
  • , Andreas GraefeAffiliated withKarlsruhe Institute of Technology
  • , J. Scott ArmstrongAffiliated withUniversity of Pennsylvania

Introduction

Forecasting is concerned with making statements about the as yet unknown. There are many ways that people go about deriving forecasts. This entry is concerned primarily with procedures that have performed well in empirical studies that contrast the accuracy of alternative methods.

Evidence about forecasting procedures has been codified as condition-action statements, rules, guidelines or, as we refer to them, principles. At the time of writing there are 140 principles. Think of them as being like a safety checklist for a commercial airliner – if the forecast is important, it is important to check all relevant items on the list. Most of these principles were derived as generalized findings from empirical comparisons of alternative forecasting methods. Interestingly, the empirical evidence sometimes conflicts with common beliefs about how to forecast.

Primarily due to the strong emphasis placed on empirical comparisons of alternative methods, researchers have made m ...

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