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Forecast Accuracy and Efficiency: An Evaluation of Ex Ante Substate Long-Term Forecasts

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  • David G. Lenze

    (Bureau of Economic and Business Research, University of Florida, Gainesville, davidl@bebr.cba.ufl.edu)

Abstract

This article identifies regional characteristics that account for differential forecast accuracy. It is found that population, income, employment, and housing start forecast accuracy depend significantly on county size, growth rate, and elderly population; industrial specialization is irrelevant. This finding has implications for making generalizations from a subset of regions. The informational efficiency of regional forecasts is also examined. It is found that employment forecasts are efficient, income forecasts tend to be overly reliant on previous period growth, and naïve population projections ignore information exploited by structural economic-demographic forecasts. These findings have important implications for the optimal combination of forecasts and the improvement of forecasting methodologies.

Suggested Citation

  • David G. Lenze, 2000. "Forecast Accuracy and Efficiency: An Evaluation of Ex Ante Substate Long-Term Forecasts," International Regional Science Review, , vol. 23(2), pages 201-226, April.
    • Handle: RePEc:sae:inrsre:v:23:y:2000:i:2:p:201-226
    DOI: 10.1177/016001700761012693
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    References listed on IDEAS

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    1. Fair, Ray C & Shiller, Robert J, 1990. "Comparing Information in Forecasts from Econometric Models," American Economic Review, American Economic Association, vol. 80(3), pages 375-389, June.
    2. Berger, Allen N & Krane, Spencer D, 1985. "The Information Efficiency of Econometric Model Forecasts," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 128-134, February.
    3. Smith, Stanley K. & Sincich, Terry, 1992. "Evaluating the forecast accuracy and bias of alternative population projections for states," International Journal of Forecasting, Elsevier, vol. 8(3), pages 495-508, November.
    4. Nordhaus, William D, 1987. "Forecasting Efficiency: Concepts and Applications," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 667-674, November.
    5. Stephen K. McNees, 1992. "How large are economic forecast errors?," New England Economic Review, Federal Reserve Bank of Boston, issue Jul, pages 25-42.
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    2. Thomas M. Fullerton Jr. & Juan Alberto Luevano & Carol Taylor West, 2004. "Accuracy of Regional Single-Family Housing Start Forecasts," Urban/Regional 0404010, University Library of Munich, Germany.

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