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Hierarchical forecasts for Australian domestic tourism

Author

Listed:
  • George Athanasopoulos
  • Roman A. Ahmed
  • Rob J. Hyndman

Abstract

In this paper we explore the hierarchical nature of tourism demand time series and produce short-term forecasts for Australian domestic tourism. The data and forecasts are organized in a hierarchy based on disaggregating the data for different geographical regions and for different purposes of travel. We consider five approaches to hierarchical forecasting: two variations of the top-down approach, the bottom-up method, a newly proposed top-down approach where top-level forecasts are disaggregated according to forecasted proportions of lower level series, and a recently proposed optimal combination approach. Our forecast performance evaluation shows that the top-down approach based on forecast proportions and the optimal combination method perform best for the tourism hierarchies we consider. By applying these methods, we produce detailed forecasts for the Australian domestic tourism market.

Suggested Citation

  • George Athanasopoulos & Roman A. Ahmed & Rob J. Hyndman, 2007. "Hierarchical forecasts for Australian domestic tourism," Monash Econometrics and Business Statistics Working Papers 12/07, Monash University, Department of Econometrics and Business Statistics, revised Nov 2007.
    • Handle: RePEc:msh:ebswps:2007-12
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    File URL: http://www.buseco.monash.edu.au/ebs/pubs/wpapers/2007/wp12-07.pdf
    File Function: Revised version, November 2007
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Australia; exponential smoothing; hierarchical forecasting; innovations state space models; optimal combination forecasts; top-down method; tourism demand.;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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