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Is a more liberal approach to conservatism needed in forecasting?

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  • Goodwin, Paul

Abstract

I discuss evidence that supports several of the principles put forward in the paper by Armstrong, Green, and Graefe (AGG), but argue that the packaging of these principles as a single “golden rule”’ and the use of the term “conservative” may lead to misunderstandings. Additional work should be carried out to investigate the extent to which these principles should be applied to probability and interval forecasts. Finally, good reasons may support why “rational” forecasters behave in ways that are inconsistent with the guidelines AGG provide in their golden-rule checklist.

Suggested Citation

  • Goodwin, Paul, 2015. "Is a more liberal approach to conservatism needed in forecasting?," Journal of Business Research, Elsevier, vol. 68(8), pages 1753-1754.
    • Handle: RePEc:eee:jbrese:v:68:y:2015:i:8:p:1753-1754
    DOI: 10.1016/j.jbusres.2015.01.060
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    References listed on IDEAS

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    1. Daniel Kahneman & Dan Lovallo, 1993. "Timid Choices and Bold Forecasts: A Cognitive Perspective on Risk Taking," Management Science, INFORMS, vol. 39(1), pages 17-31, January.
    2. MacGregor, Donald G. & Armstrong, J. Scott, 1994. "Judgmental decomposition: when does it work?," International Journal of Forecasting, Elsevier, vol. 10(4), pages 495-506, December.
    3. Fildes, Robert & Goodwin, Paul & Lawrence, Michael & Nikolopoulos, Konstantinos, 2009. "Effective forecasting and judgmental adjustments: an empirical evaluation and strategies for improvement in supply-chain planning," International Journal of Forecasting, Elsevier, vol. 25(1), pages 3-23.
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    Cited by:

    1. Thomson, Mary E. & Pollock, Andrew C. & Önkal, Dilek & Gönül, M. Sinan, 2019. "Combining forecasts: Performance and coherence," International Journal of Forecasting, Elsevier, vol. 35(2), pages 474-484.
    2. Green, Kesten C. & Armstrong, J. Scott & Graefe, Andreas, 2015. "Golden rule of forecasting rearticulated: Forecast unto others as you would have them forecast unto you," Journal of Business Research, Elsevier, vol. 68(8), pages 1768-1771.

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