Judgmental Decomposition: When Does it Work?

12 Pages Posted: 7 Feb 2005 Last revised: 8 Mar 2012

See all articles by Donald G. MacGregor

Donald G. MacGregor

MacGregor-Bates, Inc.

J. Scott Armstrong

University of Pennsylvania - Marketing Department


We hypothesized that multiplicative decomposition would improve accuracy only in certain conditions. In particular, we expected it to help for problems involving extreme and uncertain values. We first reanalyzed results from two published studies. Decomposition improved accuracy for nine problems that involved extreme and uncertain values, but for six problems with target values that were not extreme and uncertain, decomposition was not more accurate. Next, we conducted experiments involving 10 problems with 280 subjects making 1078 estimates. As hypothesized, decomposition improved accuracy when the problem involved the estimation of extreme and uncertain values. Otherwise, decomposition often produced less accurate predictions.

Keywords: Decision analysis, estimation, extreme values, forecasting, multiplicative

Suggested Citation

MacGregor, Donald G. and Armstrong, J. Scott, Judgmental Decomposition: When Does it Work?. International Journal of Forecasting, Vol. 10, pp. 495-906, 1994. Available at SSRN: https://ssrn.com/abstract=662682

Donald G. MacGregor (Contact Author)

MacGregor-Bates, Inc. ( email )

1010 Villard Ave.
Cottage Grove, OR 97424
United States
(541) 942-5727 (Phone)

J. Scott Armstrong

University of Pennsylvania - Marketing Department ( email )

700 Jon M. Huntsman Hall
3730 Walnut Street
Philadelphia, PA 19104-6340
United States
215-898-5087 (Phone)
215-898-2534 (Fax)

HOME PAGE: http://marketing.wharton.upenn.edu/people/faculty/armstrong.cfm

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