Combining expert‐adjusted forecasts. (4th February 2019)

• Record Type: Journal Article
• Authors: van Dijk, Dick; Franses, Philip Hans
• Is Part Of: Journal of forecasting. Volume 38:Number 5(2019)
• Page Start: 415
• Page End: 421
• Publication Date: 2019-02-04
• Subjects: combined expert forecasts -- expert adjustment -- forecast combination; Forecasting -- Periodicals; Forecasting -- Mathematical models -- Periodicals; 003.2
• DOI: 10.1002/for.2570
• Languages: English
• ISSNs: 0277-6693

Abstract

Abstract: It is well known that a combination of model‐based forecasts can improve upon each of the individual constituent forecasts. Most forecasts available in practice are, however, not purely based on econometric models but entail adjustments, where experts with domain‐specific knowledge modify the original model forecasts. There is much evidence that expert‐adjusted forecasts do not necessarily improve the pure model‐based forecasts. In this paper we show, however, that combined expert‐adjusted model forecasts can improve on combined model forecasts, in the case when the individual expert‐adjusted forecasts are not better than their associated model‐based forecasts. We discuss various implications of this finding.