The Golden Rule of Forecasting
Introduction
Forecasting in marketing, and some other fields, has not improved
We recently completed a paper that helps to explain why forecasting, in practice, has not improved in some fields despite the discovery of many useful forecasting techniques over the past century. In general, forecasting in government and business (and marketing) has not improved. Rather, it seems to be getting worse, and we think we know why.One reason is the belief that "things are different now."
In contrast, forecasting practice in some fields, such as medicine, political elections, weather (up to 5 days at least), engineering, and sports has advanced substantially.
Our paper, the was just published, in the Journal of Business Research. The rule is to "be conservative," Our definition of "conservative" differs from the way that it has been used in previous research on forecasting. There was commentary on the paper and .
This was a big project for us. It took three and a half years. We were amazed by the consistency of results and the effect size.
Scott
-J. Scott Armstrong
Wharton School, JMHH 747
U. of Pennsylvania, Phila., PA 19104
Home Phone 610-622-6480
