A projection is not making a prediction or forecast about what is going to happen, it is indicating what would happen if the assumptions which underpin the projection actually occur.
Comparison of Projections and Forecasts. While both involve analysis of data, the key difference between a forecast and a projection is the nature of the assertion in relation to the assumptions occurring. Comparison of Projections and Forecasts Type of Information. Nature of Assumptions. Projections indicate what future values for the population would be if the assumed patterns of change were to occur. Omage vs. Finally vs. Attendance vs. Latest Comparisons Tubercule vs.
Glyptal vs. Faucet vs. Com vs. Destroyable vs. Aboriginal vs. Coelomate vs. Ocean vs. Judge vs. Flag vs. Forbear vs. Awesomely vs. Fat vs. Sonhood vs. Ricochet vs. Channel vs. Trending Comparisons. Mandate vs. Ivermectin vs. Skinwalker vs. Socialism vs. Man vs. Supersonic vs. Gazelle vs. Jem vs. Prediction is the "guessing" of a future observation. Assuming this "guessing" is based on past data- this might be a case of estimation; such as the prediction of the height of the next person you are about to meet using an estimate of the mean height in the population.
Note though, that prediction is not always an instance of estimation. The gender of the next person you are about to meet, is not a parameter of the population in the classical sense; Predicting the gender, might require some estimation, but it will require some more In the value-at-risk case, the prediction and estimation coincide since your predicted loss, is the estimated expectancy of the loss.
Usually "estimation" is reserved for parameters and the "predicition" is for values. However, sometimes the distinction gets blurred, e. The value-at-risk VaR is an interesting case. VaR is not a parameter, but we don't say "predict VaR. So, you if you're using parametric VaR approach, then you first estimate the parameters of the distribution then calculate VaR.
If you're using the nonparametric VaR, then you directly estimate VaR similar to how you would estimate parameters. In this regard it's similar to quantile. On the other hand, the loss amount is a random value. Hence, if you're asked to forecast losses, you'd be predicting them not estimating. Again, sometimes we say "estimate" loss. So, the line is blurred, as I wrote earlier. Prediction is the use of sample regression function to estimate a value for the dependent variable conditioned on some an unobserved values of the independent variable.
Estimation is the process or technique of calculating an unknown parameter or quantity of the population. Estimation is the calculated approximation of a result. This result might be a forecast but not necessarily.
Extrapolation is estimating the value of a variable outside a known range of values by assuming that the estimated value follows some pattern from the known ones. The simplest and most popular form of extrapolation is estimating a linear trend based on the known data.
Alternatives to linear extrapolation include polynomial and conical extrapolation. Like estimation, extrapolation can be used for forecasting but it isn't limited to forecasting. Prediction is simply saying something about the future. Predictions are usually focused on outcomes and not the pathway to those outcomes.
For example, I could predict that by all vehicles will be powered with electric motors without explaining how we get from low adoption in to full adoption by As you can see from the previous example, predictions are not necessarily based on data. Forecasting is the process of making a forecast or prediction. The terms forecast and prediction are often used interchangeably but sometimes forecasts are distinguished from predictions in that forecasts often provide explanations of the pathways to an outcome.
For example, an electric vehicle adoption forecast might include the pathway to full electric vehicle adoption following an S-shaped adoption pattern where few cars are electric before , an inflection point occurs at with rapid adoption, and the majority of cars are electric after Estimation, extrapolation, prediction, and forecasting are not mutually exhaustive and collectively exhaustive terms. Good long-term forecasts for complex problems often need to use techniques other than extrapolation in order to produce plausible results.
Forecasts and predictions can also occur without any kind of calculated estimations. Sign up to join this community. The best answers are voted up and rise to the top. Stack Overflow for Teams — Collaborate and share knowledge with a private group.
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