Forecasting

Organized efforts to predict or forecast the future may have derived from observations by early humans of heavenly objects, which changed position in predictable patterns. The practice of astrology, today considered pseudoscience, evolved from the human desire to forecast the future. Much of physical science can be read as an attempt to make quantitative and objective predictions about events.

Forecasting is the process of estimation in unknown situations. Due to the element of the unknown, risk and uncertainty are central to forecasting and prediction. Statistical forecasting is the process of estimation in unknown situations. It can refer to estimation of time series, cross-sectional or longitudinal data.

Prediction is a similar, but more general term. Both can refer to estimation of time series, cross-sectional or longitudinal data. Econometric forecasting methods use the assumption that it is possible to identify the underlying factors that might influence the variable that is being forecast. If the causes are understood, projections of the influencing variables can be made and used in the forecast. Judgmental forecasting methods incorporate intuitive judgments, opinions and probability estimates, as in the case of the Delphi method, scenario building, and simulations. Forecasting is applied in many areas, including weather forecasting, earthquake prediction, transport planning, and labour market planning.

Despite the development of cognitive instruments for the comprehension of future, the stochastic nature of many natural and social processes has made precise forecasting of the future elusive. Modern efforts such as future studies attempt to predict social trends, while more ancient practices, such as weather forecasting, have benefited from scientific and causal modelling.