THE COMPLEX RELATIONSHIP BETWEEN FORECAST SKILL AND FORECAST VALUE - A REAL-WORD ANALYSIS

For routine forecasts of temperature and precipitation the relative sk ill advantage of human forecasters with respect to the numerical-stati stical guidance is small (and diminishing). Since the relationship bet ween forecast skill and the value of those forecasts is complex, the a uthors have examined their value across a range of real-world user con texts. It is found that although in most cases the meteorological info rmation possessed considerable value to the users, human intervention in making those forecasts (as measured by National Weather Service for ecasts) has generally led to minimal gains in value beyond that which is obtainable through direct use of numerical-statistical guidance. An important exception is the use of meteorological information by gas u tilities during peak wintertime periods; in those circumstances, the v alue of human intervention was considerable. The presence of informati on in the National Weather Service forecasts independent of that conta ined in the numerical-statistical guidance was also established. Despi te this, application of the additional information through a combined National Weather Service/guidance forecast provided only a small gain in value in most cases. In the most successful forecast context (the g as utility), the combined approach led to a loss of value relative to the unaltered National Weather Service forecasts. However, recent tren ds toward increased skill in probability of precipitation forecasts ha ve led to some gains in the relative value of the National Weather Ser vice forecasts, concurrent with a shift toward smaller optimal cost-lo ss ratio distributions, findings that are significant with respect to practical business considerations. Furthermore, all of the application s studied showed the potential for considerable further growth in fore cast value with continued increases in forecast skill. The relevance o f our findings to the future of public and private meteorological fore casting is briefly discussed.