Sophisticated forecasting models are not always better than simple ones.

Question

Quizplus · Accepted Answer

There are situations where simple forecasting models can outperform more sophisticated ones. Factors such as the availability and quality of data, the predictability of the variable being forecasted, and the complexity of the underlying relationships can all impact the effectiveness of different forecasting models. Additionally, simple models may be easier to interpret and communicate to stakeholders, potentially providing more value than a complex model that is difficult to explain or understand.

Sophisticated Forecasting Models Are Not Always Better Than Simple Ones