Forecast bias

A forecast bias occurs when there are consistent differences between actual outcomes and previously generated forecasts of those quantities; that is: forecasts may have a general tendency to be too high or too low. A normal property of a good forecast is that it is not biased.^[1]

As a quantitative measure, the "forecast bias" can be specified as a probabilistic or statistical property of the forecast error. A typical measure of bias of forecasting procedure is the arithmetic mean or expected value of the forecast errors, but other measures of bias are possible. For example, a median-unbiased forecast would be one where half of the forecasts are too low and half too high: see Bias of an estimator.

In contexts where forecasts are being produced on a repetitive basis, the performance of the forecasting system may be monitored using a tracking signal, which provides an automatically maintained summary of the forecasts produced up to any given time. This can be used to monitor for deteriorating performance of the system.

References

↑ APICS Dictionary 12th Edition, American Production and Inventory Control Society. Available for download at www.apics.org/Resources/APICSDictionary.htm.

Biases

Biases in judgment and decision-making	Acquiescence bias Anchoring bias Attentional bias Attribution bias Belief bias Choice-supportive bias Cognitive bias Confirmation bias Congruence bias Correspondence bias Halo effect Hindsight bias Hostile attribution bias Memory bias Outcome bias Response bias Self-serving bias Status quo bias Survivorship bias

Statistical biases	Bias of an estimator Information bias Lead time bias Omitted-variable bias Sampling bias Selection bias Self-selection bias Social desirability bias Spectrum bias Systematic error Systemic bias

Other	Academic bias FUTON bias Media bias No abstract available bias Publication bias Reporting bias

Forecast bias

See also

References