Glossary of Statistical Terms: Definition Forecast
A forecast is a prediction of the future. Forecasts are created using models; these models take existing time series data and calculate possible future values based on the behavior of the historic data and the modeler’s knowledge of the factors that drive the system.
It is common to forecast the behavior of complex systems such as the global economy, to predict financial stability, or the atmosphere, to predict the weather. There are many drivers that alter the outcome in the real-world for systems like these, and because of their complexity combined with the occurrence of unforeseen events it is impossible to predict the future with total accuracy. However, models are improved over time as modelers learn more about the behavior of the systems and check the modeled predictions with real data as it becomes available.
Please note that the definitions in our statistics encyclopedia are simplified explanations of terms. Our goal is to make the definitions accessible for a broad audience; thus it is possible that some definitions do not adhere entirely to scientific standards.