Sunday, 7 September 2014

Predicting the future

In How to see into the future Tim Harford looks at research into how successful people are at predicting the future.

Here's the article's recommendations on how to be more accurate in your predictions:
Some participants in the Good Judgment Project were given advice on how to transform their knowledge about the world into a probabilistic forecast – and this training, while brief, led to a sharp improvement in forecasting performance.
The advice, a few pages in total, was summarised with the acronym CHAMP:
  • Comparisons are important: use relevant comparisons as a starting point;
  • Historical trends can help: look at history unless you have a strong reason to expect change;
  • Average opinions: experts disagree, so find out what they think and pick a midpoint;
  • Mathematical models: when model-based predictions are available, you should take them into account;
  • Predictable biases exist and can be allowed for. Don’t let your hopes influence your forecasts, for example; don’t stubbornly cling to old forecasts in the face of news.

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