Contents
Is it a common practice to combine forecasts?
Combining forecasts, is a common practice. If you have several forecasts than if you take average of those forecasts the resulting combined forecast should be better in terms of accuracy than any of the individual forecasts.
How to combine forecasts with zero probabilities?
You ask about three things: (a) how to combine several forecasts to get single forecast, (b) if Bayesian approach can be used in here, and (c) how to deal with zero-probabilities. Combining forecasts, is a common practice.
What happens when you combine probabilities from different sources?
If you had knowledge on reliability of each source you could assign weights that are proportional to reliability of each source, so more reliable sources have greater impact on the final combined forecast.
How to calculate the average of expert forecasts?
In averaging expert forecasts sometimes we want to correct for the fact that experts tend to regress to the mean (Baron et al, 2013), or make their forecasts more extreme (Ariely et al, 2000; Erev et al, 1994). To achieve this one could use transformations of individual forecasts p i, e.g. logit function (2) g ( p i) = ( p i 1 − p i) a
Which is the seminal paper on combining forecasts?
2. Combining forecasts: Theory 2.1. Contributions from forecasting The work by Bates and Granger (1969) often is considered to be the seminal article on combining forecasts. In this paper, the authors developed and tested a number of techniques for combining point forecasts.
R. T. Clemen / Combining forecasts 561 forecast’ have been used synonymously, although some researchers have made a distinction (e.g., Reid, 1974, in his discussion of Newbold and Granger (1974) or Kang, 1986). 2. Combining forecasts: Theory 2.1.