Adjustment of forecasts with model consistent expectations

Derek W. Bunn*, Ahti A. Salo

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

13 Citations (Scopus)


This paper provides a practical procedure to support the judgemental adjustment of statistical forecasts, for the class of problems where judgement is necessary to compensate for omitted variables in the model. The analysis suggests that many casual adjustments in practice may be prone to a double-counting bias, and that the use of model-consistent expectations, for the omitted variables, should provide a basis for judgemental adjustments free of such bias. The procedure is applied to a real case study, from the petroleum industry, based upon capital cost forecasting for major offshore facilities.

Original languageEnglish
Pages (from-to)163-170
Number of pages8
JournalInternational Journal of Forecasting
Issue number1
Publication statusPublished - Mar 1996
MoE publication typeA1 Journal article-refereed


  • Adjustment
  • Bias
  • Capital costs
  • Expectations
  • Forecasting
  • Inflation
  • Judgement


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