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Article
Rule Based Forecasting [RBF] - Improving Efficacy of Judgmental Forecasts Using Simplified Expert Rules
International Research Journal of Applied Finance
  • Monica Adya, Marquette University
  • Edward J. Lusk, SUNY Plattsburgh
Document Type
Article
Language
eng
Format of Original
19 p.
Publication Date
1-1-2013
Publisher
Kaizen Publications
Disciplines
Abstract

Rule-based Forecasting (RBF) has emerged to be an effective forecasting model compared to well-accepted benchmarks. However, the original RBF model, introduced in1992, incorporates 99 production rules and is, therefore, difficult to apply judgmentally. In this research study, we present a core rule-set from RBF that can be used to inform both judgmental forecasting practice and pedagogy. The simplified rule-set, called coreRBF, is validated by asking forecasters to judgmentally apply the rules to time series forecasting tasks. Results demonstrate that forecasting accuracy from judgmental use of coreRBF is not statistically different from that reported from similar applications of RBF. Further, we benchmarked these coreRBF forecasts against forecasts from (a) untrained forecasters, (b) an expert system based on RBF, and (c) the original 1992 RBF study. Forecast accuracies were in the hypothesized direction, arguing for the generalizability and validity of the coreRBF rules.

Comments

Published version. International Research Journal of Applied Finance, Vol. IV, No. 8 (August 2013): 1006-1024. © 2013 Kaizen Publications. Used with permission.

Citation Information
Monica Adya and Edward J. Lusk. "Rule Based Forecasting [RBF] - Improving Efficacy of Judgmental Forecasts Using Simplified Expert Rules" International Research Journal of Applied Finance (2013) ISSN: 2229-6891
Available at: http://works.bepress.com/monica_adya/18/