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The ARR2 prior: flexible predictive prior definition for Bayesian auto-regressions

David Kohns, Noa Kallioinen, Yann McLatchie, Aki Vehtari

arXiv 30 May 2024 · Statistics — Computation · publishedBayesian Analysis (2025)

arXiv:2405.19920 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We present the ARR2 prior, a joint prior over the auto-regressive components in Bayesian time-series models and their induced $R^2$. Compared to other priors designed for times-series models, the ARR2 prior allows for flexible and intuitive shrinkage. We derive the prior for pure auto-regressive models, and extend it to auto-regressive models with exogenous inputs, and state-space models. Through both simulations and real-world modelling exercises, we demonstrate the efficacy of the ARR2 prior in improving sparse and reliable inference, while showing greater inference quality and predictive performance than other shrinkage priors. An open-source implementation of the prior is provided.

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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
1Aguilar, J. E. and Bürkner, P.-C (2023) Intuitive joint priors for Bayesian linear multilevel models: The R2D2M2 prior0.9619489%
2Zhang, Y. D., Naughton, B. P., Bondell, H. D., and Reich, B. J (2022) Bayesian Regression Using a Prior on the Model Fit: The R2-D2 Shrinkage Prior0.9568488%
3Stan Development Team (2025) Stan User's Guide and Reference Manual0.8434375%
4Yanchenko, E., Bondell, H. D., and Reich, B. J (2024) The R2D2 Prior for Generalized Linear Mixed Models0.84333100%
5Chan, J. C (2021) Minnesota-type adaptive hierarchical priors for large Bayesian VARs0.7374450%
6Harvey, A. C (1990) Forecasting, Structural Time Series Models and the Kalman Filter0.7374275%
7Heaps, S. E (2022) Enforcing stationarity through the prior in vector autoregressions0.7373367%
8Hamilton, J. D (2020) Time series analysis0.73732100%
9Piironen, J. and Vehtari, A (2017) On the Hyperprior Choice for the Global Shrinkage Parameter in the Horseshoe Prior self0.73732100%
10Doan, T., Litterman, R., and Sims, C (1984) Forecasting and conditional projection using realistic prior distributions0.64422100%

Showing the top 10 of 80 scored citations.