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Assessing the informational content of official Australian Bureau of Meteorology forecasts of wind speed

Citation

Hurn, S and Tian, J and Xu, L, Assessing the informational content of official Australian Bureau of Meteorology forecasts of wind speed, Economic Record pp. 1-23. ISSN 0013-0249 (2021) [Refereed Article]


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DOI: doi:10.1111/1475-4932.12627

Abstract

Understanding forecast revisions is critical for weather forecast users to determine the optimal timing for their planning decisions. A set of multi-horizon forecasts for wind speed produced by the Australian Bureau of Meteorology for 12 weather stations in eastern Australia are examined. The forecasts are examined in terms of the econometric definition of rationality and, as a robustness check, the economic value of the forecasts is also assessed using a cost–loss model. It is demonstrated that while the forecasts exhibit some of the characteristics of rational forecasts, when official testing is introduced forecast rationality is rejected at all the weather stations considered. Furthermore, the behaviour of the forecasts is shown to be very erratic over the course of the day and over forecast horizons. Although there is some evidence that the official forecasts can provide positive economic value, this metric also indicates that there is substantial room for improvement.

Item Details

Item Type:Refereed Article
Research Division:Economics
Research Group:Applied economics
Research Field:Applied economics not elsewhere classified
Objective Division:Economic Framework
Objective Group:Other economic framework
Objective Field:Other economic framework not elsewhere classified
UTAS Author:Tian, J (Dr Jing Tian)
ID Code:145594
Year Published:2021
Deposited By:Economics and Finance
Deposited On:2021-07-28
Last Modified:2021-07-29
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