What Is Forecasting?

Beware of false prophets, which come to you in sheep's clothing, but inwardly they are ravening wolves.

- Matthew 7:15

Podcast of the Day

Can you predict the future? Or at least gauge the probability of political or economic events in the near future? Philip Tetlock of the University of Pennsylvania and author of Superforecasting talks with EconTalk host Russ Roberts about his work on assessing probabilities with teams of thoughtful amateurs. Tetlock finds that teams of amateurs trained in gathering information and thinking about it systematically outperformed experts in assigning probabilities of various events in a competition organized by IARPA, research agency under the Director of National Intelligence. In this conversation, Tetlock discusses the meaning, reliability, and usefulness of trying to assign probabilities to one-time events.

Listen to Phillip Tetlock on Superforecasting

Video of the Day

Short Article of the Day

IS there a solution to this country’s polarized politics?

Consider the debate over the nuclear deal with Iran, which was one of the nastiest foreign policy fights in recent memory. There was apocalyptic rhetoric, multimillion-dollar lobbying on both sides and a near-party-line Senate vote. But in another respect, the dispute was hardly unique: Like all policy debates, it was, at its core, a contest between competing predictions.

Opponents of the deal predicted that the agreement would not prevent Iran from getting the bomb, would put Israel at greater risk and would further destabilize the region. The deal’s supporters forecast that it would stop (or at least delay) Iran from fielding a nuclear weapon, would increase security for the United States and Israel and would underscore American leadership.

The problem with such predictions is that it is difficult to square them with objective reality. Why? Because few of them are specific enough to be testable...

Continue reading Tetlock & Scoblic's article: The Power of Precise Predictions

Further Reading

Forecasting is the process of making predictions of the future based on past and present data and most commonly by analysis of trends. A commonplace example might be estimation of some variable of interest at some specified future date. Prediction is a similar, but more general term. Both might refer to formal statistical methods employing time series, cross-sectional or longitudinal data, or alternatively to less formal judgmental methods. Usage can differ between areas of application: for example, in hydrology the terms "forecast" and "forecasting" are sometimes reserved for estimates of values at certain specific future times, while the term "prediction" is used for more general estimates, such as the number of times floods will occur over a long period...

Continue reading the Wikipedia article on Forecasting

Bonus Webcomic

Related Topics

 Decision TheoryThe Future | Uncertainty

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