Forecasting Expected

Policy Outcomes

-Distinguish projections, predictions, and conjectures.

-Understand the effects of temporal, historical, and institutional contextson forecast accuracy.
-Contrast potential, plausible, and normative futures.
-Describe objects, bases, methods, and products of forecasts.
- Distinguish extrapolative, theoretical, and judgmental forecasting methods.
-Use statistical software to make point and interval estimates of expected policy outcomes.
-Analyze a case in policy forecasting involving issues of environmental justice.

Forecasting provides a prospective vision of policy outcomes, thereby contri- buting to understanding,
control, and policy guidance. However, forecasts of all kinds—whether based on expert judgment, on
the extrapolation of historical trends, or on technically sophisticated econometric models—are prone to
errors based on faulty or implausible assumptions, on the effects of institutional incentive systems, and
on the accelerating complexity of policy issues in areas such as health, welfare, education, and the
environment. We begin this chapter with an overview of the forms, functions, and performance of
forecasting methods in policy analysis, stressing a range of criteria for assessing their strengths and
limitations. We then compare and contrast three major approaches to forecasting: extrapolative
forecasting, theoretical forecasting, and judgmental forecasting. We conclude with a presentation of
techniques employed in conjunction with these three approaches.
From Chapter 4 of Public Policy Analysis, Fifth Edition.William N. Dunn. Copyright © 2012 by
PearsonEducation, Inc. All rights reserved.
www.irpublicpolicy.ir
FORECASTING IN POLICY ANALYSIS
Forecasting yields factual information about expected policy outcomes on the basis of prior information
about policy problems. Forecasts take three principal forms: projec- tions, predictions, and conjectures.
1. A projection is a forecast that is based on the extrapolation of current and historical trends into the
future. Projections put forth designative claims based on arguments about methods and parallel cases,
in which assumptions about the validity of particular methods (e.g., time-series analysis) or similarities
between cases (e.g., past and future policies) are used to establish the cogency of claims. Projections
may be supplemented by arguments from authorityauthorit (e.g., the opinions of experts) and cause
(e.g., field experiments).
2. A prediction is a forecast based on theoretical laws (e.g., the law of diminishing utility of money),
theoretical propositions (e.g., the proposition that civil disorders are caused by the gap between
expectations and capabilities), or analogies (e.g., the analogy between the growth of government and
the growth of biological organisms). The essential feature of a prediction is that it explains the
generative mechanisms (“causes”) and consequences (“effects”) believed to underlie a prediction.
Predictions may be supplemented by arguments based on authority (e.g., informed judgment) and
method (e.g., econometric modeling).
3. A conjecture is a forecast based on informed judgments about future states of society. These
judgments may take the form of intuitive arguments, for which assumptions about the insight, creative
intellectual power, or tacit knowledge of knowledgeables (e.g., “policy insiders”) are used to support
claims about the future. Judgments may also be expressed in the form of motivational arguments
whereby present or future goals, values, and intentions are used to establish the plausibility of claims.
For example, conjectures about future social values (e.g., leisure) have been used to claim that the
average workweek will be reduced to thirty hours in the next twenty years. Conjectures may be
supplemented by arguments based on authority, method, and cause.
Aims of Forecasting
Policy forecasts, whether based on extrapolation, theory, or informed judgment, have several important
aims. First, and most important, forecasts provide informa- tion about future changes in policies and
their consequences. The aims of forecasting are similar to those of much natural and social science
research, insofar as both seek to understand and control the human and material environment.
Nevertheless, efforts to forecast future societal states are “especially related to control—that is, to the
attempt to plan and to set policy so that the best possible course of action might be chosen among the
possibilities which the future offers.”1