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A Composite Approach to Forecasting State Government Revenues


  • Thomas M Fullerton Jr

    (University of Texas at El Paso)


Fiscal uncertainty has led many states to utilize a variety of economic and revenue forecasting methods. To improve accuracy, many budget analysts use alternative projections generated by different techniques. Composite modeling goes a step further and allows users to systematically combine two or more forecasts. This paper examines the effectiveness of composite forecasting of sales tax revenues in Idaho. Baseline projections are provided by an econometric model and by a univariate time series equation. Composite forecasts are found to outperform both baseline models. Combined forecasts are also found to be more precise than executive branch forecasts actually adopted from 1982 through 1985.

Suggested Citation

  • Thomas M Fullerton Jr, 2004. "A Composite Approach to Forecasting State Government Revenues," Public Economics 0408006, EconWPA.
  • Handle: RePEc:wpa:wuwppe:0408006
    Note: Type of Document - doc; pages: 8

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    References listed on IDEAS

    1. Bretschneider, Stuart I. & Gorr, Wilpen L. & Grizzle, Gloria & Klay, Earle, 1989. "Political and organizational influences on the accuracy of forecasting state government revenues," International Journal of Forecasting, Elsevier, vol. 5(3), pages 307-319.
    2. Thomas M Fullerton Jr, 2004. "Rational Reactions to Temporary Sales Tax Legislation," Public Economics 0408004, EconWPA.
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    Cited by:

    1. MOULIN, Laurent & SALTO, Matteo & SILVESTRINI, Andrea & VEREDAS, David, 2004. "Using intra annual information to forecast the annual state deficits : the case of France," CORE Discussion Papers 2004048, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. Fullerton, Jr., Thomas M. & Taylor West, Carol A., 1998. "Regional Econometric Housing Start Forecast Accuracy in Florida," The Review of Regional Studies, Southern Regional Science Association, vol. 28(3), pages 15-42, Winter.
    3. Thomas M Fullerton Jr & Eiichi Araki, 2004. "New Directions in Latin American Macroeconometrics," Development and Comp Systems 0408002, EconWPA.

    More about this item


    Composite Forecasting; State Taxes; Applied Econometrics;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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