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Forecasting the Index of Housing Stats in the United States

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The Index of Housing Stats in the United States: 1986 to 1997 (with 1985=100)

1986 1987 1988 1989 1990 1991

116 122 121 121 111 97

1992 1993 1994 1995 1996 1997 1998

113 125 146 142 156 162 163

(a) Forecast the index of housing stats in the United States in 1998 by exponential smoothing with w=0.3 and w=0.7. (b) Which of these forecasts gives a better forecast for 1998? Which gives a better forecast on the average?

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Solution Summary

This solution explains how to forecast future statistics using exponential smoothing.

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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