QUALITATIVE FORECAST EVALUATION - A COMPARISON OF 2 PERFORMANCE-MEASURES

Agricultural producers and marketers often have access to several sets of forecasts on the same series. Decision makers must be able to eval uate the relative accuracy of the forecasts. The ability to evaluate w hether a series will move up or down is important for series related t o futures, options, other asset prices, and situations where processes can be modified according to changing economic conditions. A measure of qualitative forecast accuracy from Naik and Leuthold is compared to a probability-based measure developed by Henriksson and Merton. The H enriksson-Merton measure is shown to provide additional, and more accu rate, information concerning a model's qualitative forecasting ability .