USDA INTERVAL FORECASTS OF CORN AND SOYBEAN PRICES: OVERCONFIDENCE OR RATIONAL INACCURACY?

Olga Isengildina, Scott Irwin and Darrel L. Good

No 18987, 2003 Conference, April 21-22, 2003, St. Louis, Missouri from NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: The USDA WASDE (World Agricultural Supply and Demand Estimates) price forecasts are published in the form of an interval, but typically analyzed as point estimates. Thus, all information about uncertainty imbedded in the forecast is ignored. The purpose of this paper is to evaluate the accuracy of WASDE price forecasts using methodology suitable for testing judgmental interval forecasts. Empirical analysis includes traditional statistical tests as well as an alternative behavioral evaluation (accuracy-informativeness tradeoff model). The results of the traditional analysis indicate overconfidence of WASDE price interval forecasts, while the results of the behavioral approach suggest rational inaccuracy.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Pages: 27
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ncrthr:18987

DOI: 10.22004/ag.econ.18987

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