Open Access Open Access  Restricted Access Subscription Access

Is the MdAPE a Preferred Forecasting Accuracy Measurement over the MAD and MSE?: Evidence from Financial Data and Simulation

Louie Ren, Yong U. Glasure, Peter Ren


Empirical results from the financial data and simulation in this study show that the MdAPE can only provide consistent forecast accuracies as the Mean Absolute Deviation (MAD) for independent normal time series with moderate c.v.’s for medium or long-term forecasts. But the MAD can clearly show the differences from forecasting methods of the different moving average length. Moreover, the current findings thus refute the assertions made by Goodwin and Lawton (1999) and Makridakis et al. (1982) that the MAPE or MdAPE is a preferred measurement of forecasting accuracy over the MAD and the MSE. In general, the MAD is still recommended to be used to analyze forecasting methods on random time series.


Comparison of forecasting measures using financial data and simulation; Forecast evaluation, Forecast error measures.

Full Text:


Disclaimer/Regarding indexing issue:

We have provided the online access of all issues and papers to the indexing agencies (as given on journal web site). It’s depend on indexing agencies when, how and what manner they can index or not. Hence, we like to inform that on the basis of earlier indexing, we can’t predict the today or future indexing policy of third party (i.e. indexing agencies) as they have right to discontinue any journal at any time without prior information to the journal. So, please neither sends any question nor expects any answer from us on the behalf of third party i.e. indexing agencies.Hence, we will not issue any certificate or letter for indexing issue. Our role is just to provide the online access to them. So we do properly this and one can visit indexing agencies website to get the authentic information.