Revenue Forecasting Practices: Differences Across Countries and Consequences for Forecasting Performance

32 Pages Posted: 22 Apr 2009

See all articles by Thiess Buettner

Thiess Buettner

Ifo Institute for Economic Research; CESifo (Center for Economic Studies and Ifo Institute); Ludwig-Maximilians University of Munich

Bjoern Kauder

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: April 2009

Abstract

This paper reviews the practice and performance of revenue forecasting in selected OECD countries. While the mean forecast errors are small in most countries, the precision of the forecasts measured by the standard deviation of the forecast error differs substantially across countries. Based on a comparison of forecasting practices we show that these differences can be attributed to a large part to differences in the timing of the forecasts and in the tax structure. In addition, we find some evidence that differences in methods and institutions also matter for the forecasting precision. In particular, we find that the use of macroeconomic models as well as the independence of revenue forecasting are associated with a lower standard deviation of the forecast error.

Keywords: revenue forecasting, international comparison, OECD countries, forecast error

JEL Classification: H68, H11

Suggested Citation

Buettner, Thiess and Kauder, Bjoern, Revenue Forecasting Practices: Differences Across Countries and Consequences for Forecasting Performance (April 2009). CESifo Working Paper Series No. 2628, Available at SSRN: https://ssrn.com/abstract=1393188

Thiess Buettner (Contact Author)

Ifo Institute for Economic Research ( email )

Poschingerstr. 5
Munich
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Ludwig-Maximilians University of Munich

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

Bjoern Kauder

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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