On the fit and forecasting performance of grey prediction models for projecting educational attainment

Abstract

Purpose The purpose of this paper is to evaluate the forecasting performance of grey prediction models on educational attainment vis-à-vis that of exponential smoothing combined with multiple linear regression employed by the National Center for Education Statistics (NCES). Design/methodology/approach An out-of-sample forecasting experiment was carried out to compare the forecasting performances on educational attainments among GM(1,1), GM(1,1) rolling, FGM(1,1) derived from the grey system theory and exponential smoothing prediction combined with multivariate regression. The predictive power of each model was measured based on MAD, MAPE, RMSE and simple F-test of equal variance. Findings The forecasting efficiency evaluated by MAD, MAPE, RMSE and simple F-test of equal variance revealed that the GM(1,1) rolling model displays promise for use in forecasting educational attainment. Research limitations/implications Since the possible inadequacy of MAD, MAPE, RMSE and F-type test of equal variance was documented in the literature, further large-scale forecasting comparison studies may be done to test the prediction powers of grey prediction and its competing out-of-sample forecasts by other alternative measures of accuracy. Practical implications The findings of this study would be useful for NCES and professional forecasters who are expected to provide government authorities and education policy makers with accurate information for planning future policy directions and optimizing decision-making. Originality/value As a continuing effort to evaluate the forecasting efficiency of grey prediction models, the present study provided accumulated evidence for the predictive power of grey prediction on short-term forecasts of educational statistics.