Empirically-transformed linear opinion pools

B-Tier
Journal: International Journal of Forecasting
Year: 2023
Volume: 39
Issue: 2
Pages: 736-753

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

The linear opinion pool (LOP) produces potentially non-Gaussian combination forecast densities. In this paper, we propose a computationally convenient transformation for the LOP to mirror the non-Gaussianity exhibited by the target variable. Our methodology involves a Smirnov transform to reshape the LOP combination forecasts using the empirical cumulative distribution function. We illustrate our empirically transformed opinion pool (EtLOP) approach with an application examining quarterly real-time forecasts for U.S. inflation evaluated on a sample from 1990:1 to 2020:2. EtLOP improves performance by approximately 10% to 30% in terms of the continuous ranked probability score across forecasting horizons.

Technical Details

RePEc Handle
repec:eee:intfor:v:39:y:2023:i:2:p:736-753
Journal Field
Econometrics
Author Count
3
Added to Database
2026-01-29