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Proper scoring rules for evaluating asymmetry in density forecasting

Matteo Iacopini, Francesco Ravazzolo, Luca Rossini

arXiv 19 Jun 2020 · Statistics — Methodology

arXiv:2006.11265 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper proposes a novel asymmetric continuous probabilistic score (ACPS) for evaluating and comparing density forecasts. It extends the proposed score and defines a weighted version, which emphasizes regions of interest, such as the tails or the center of a variable's range. A test is also introduced to statistically compare the predictive ability of different forecasts. The ACPS is of general use in any situation where the decision maker has asymmetric preferences in the evaluation of the forecasts. In an artificial experiment, the implications of varying the level of asymmetry in the ACPS are illustrated. Then, the proposed score and test are applied to assess and compare density forecasts of macroeconomic relevant datasets (US employment growth) and of commodity prices (oil and electricity prices) with particular focus on the recent COVID-19 crisis period.

Citation extraction

45
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appendix boundary found by appendix_titled_section at “Supplementary Material to ``Proper scoring rules for evaluating asymmetry in density forecasting''” · 80% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Gneiting, T. and R. Ranjan (2011) Comparing density forecasts using threshold- and quantile-weighted scoring rules0.84333100%
2Winkler, R. L (1994) Evaluating probabilities: Asymmetric scoring rules0.73732100%
3Christoffersen, P. F. and F. X. Diebold (1996) Further results on forecasting and model selection under asymmetric loss0.64422100%
4Elliott, G., A. Timmermann, and I. Komunjer (2005) Estimation and testing of forecast rationality under flexible loss0.64422100%
5Patton, A. J. and A. Timmermann (2007) Testing forecast optimality under unknown loss0.64422100%
6Demetrescu, M. and S. H. Hoke (2019) Predictive regressions under asymmetric loss: Factor augmentation and model selection0.64422100%
7Gneiting, T. and A. E. Raftery (2007) Strictly proper scoring rules, prediction, and estimation0.64422100%
8Matheson, J. E. and R. L. Winkler (1976) Scoring rules for continuous probability distributions0.58531100%
9Gianfreda, A., F. Ravazzolo, and L. Rossini (2020) Large time-varying volatility models for electricity prices0.51121100%
10Gneiting, T (2011) Making and evaluating point forecasts0.51121100%

Showing the top 10 of 45 scored citations.