Are we more accurate in predicting short- or long-term future?

摘要

A puzzling question is the relationship of the time horizon of a forecast and its accuracy. Most people assume that the further in the future an event is being forecast, the less likely it will occur since so many things change with the passing of time. This goes for aviation variables as well as for life overall. We are more comfortable predicting the future of our favourite sports team in the coming weekend than prognosticating its future in a decade. In January, I spoke at the 98th annual meeting of the Transportation Research Board in Washington DC. The session I attended dealt with forecasting techniques in aviation. Participants were the usual cross section of economists from government, academia, trade associations, consulting firms and manufacturers. I used to attend these January meetings regularly a few decades ago and was amazed how little has changed in the topics discussed. Many speakers raised the subject I mentioned above. There was a consensus that accuracy diminishes greatly the further in the future we try to predict some variables. The rationale was that we kind of know what will happen next year but there are too many variables that can dramatically change over time.