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Decision-making from probability forecasts based on forecast value

Published online by Cambridge University Press:  20 August 2002

Kenneth R. Mylne
Affiliation:
The Met Office, London Road, Bracknell, Berks RG12 2SZ UK
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Abstract

A method of estimating the economic value of weather forecasts for decision-making is described. This method has recently been used for user-oriented verification of probability forecasts, but is here applied to aid forecast users in optimising their decision-making from probability forecasts. Value may be calculated in the same way for either probability forecasts or deterministic forecasts, and thus provides the user with a direct comparison of the value of each in terms of money saved, which is more relevant than most standard verification scores. The method is illustrated using site-specific probability forecasts generated from the ECMWF ensemble prediction system and deterministic forecasts from the ECMWF high-resolution global model. It is found that for most forecast events and for most users the probability forecasts have greater value than the deterministic forecasts from a higher resolution model.

Type
Research Article
Copyright
© 2002 Royal Meteorological Society

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