A Comparative Study of Methods for Long-Range Market Forecasting

Management Science, Vol. 19, No. 2, pp. 211-221, 1972

12 Pages Posted: 9 Feb 2005 Last revised: 29 Jul 2008

See all articles by J. Scott Armstrong

J. Scott Armstrong

University of Pennsylvania - Marketing Department

Michael C. Grohman

affiliation not provided to SSRN

Abstract

The following hypotheses about long-range market forecasting were examined:

- Objective methods provide more accuracy than do subjective methods. - The relative advantage of objective over subjective methods increases as the amount of change in the environment increases. - Causal methods provide more accuracy than do naive methods. - The relative advantage of causal over naive methods increases as the amount of change in the environment increases.

Support for these hypotheses was then obtained from the literature and from a study of a single market. The study used three different models to make ex ante forecasts of the U.S. air travel market from 1963 through 1968. These hypotheses imply that econometric methods are more accurate for long range market forecasting than are the major alternatives, expert judgment and extrapolation, and that the relative superiority of econometric methods increases as the time span of the forecast increases.

Keywords: Market forecast, forecasting, long-range forcasting, econometric model

Suggested Citation

Armstrong, J. Scott and Grohman, Michael C., A Comparative Study of Methods for Long-Range Market Forecasting. Management Science, Vol. 19, No. 2, pp. 211-221, 1972. Available at SSRN: https://ssrn.com/abstract=664088

J. Scott Armstrong (Contact Author)

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

Michael C. Grohman

affiliation not provided to SSRN

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