Beyond Error Measures to the Utility And Cost of the Forecasts

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Abstract

The authors criticize the exclusive use of forecast-error metrics to evaluate forecast methods, arguing for evaluations of forecast value, a construct that also incorporates considerations of the utility to the forecast user (influence on decision making), the cost of computation, and opportunity cost of understandability. They highlight evidence on forecast utility and cost from recent studies and explore the implications for forecast-method selection.
Original languageEnglish
Pages (from-to)36-45
Number of pages10
JournalForesight: the International Journal of Applied Forecasting
Volume63
Publication statusPublished - 31 Dec 2021

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