April 26, 2005

Point estimates versus Confidence intervals

Frequently, the question is raised what the best way to present short-term forecasts is: to provide point estimates or confidence intervals.

In April 2003, a Review Committee chaired by Prof. Dr. Klaus Zimmermann assessed the CPB Netherlands Bureau for Economic Policy Analysis. In their report CPB in Focus , the Committee recommends, among other things, that the 'model forecasts be presented with ranges or high/low bounds indicated, rather than point estimates'. Until now, CPB has preferred to present its short-term forecasts as point estimates (in quarters).



Laura Thissen