The Economic Value Of Ensemble-Based Weather Forecasts

Abstract

Abstract The potential economic benefit associated with the use of an ensemble of forecasts versus anequivalent or higher-resolution control forecast is discussed. Neither forecast systems are post-processed,except a simple calibration that is applied to make them reliable. A simple decision-making model is used where all potential users of weather forecasts are characterized by the ratio between the cost of their action to preventweather-related damages, and the loss that they incur in case they do not protect their operations. It isshown that the ensemble forecast system can be used by a much wider range of users. Furthermore,for many, and for beyond 4-day lead time for all users, the ensemble provides greater potential economicbenefit than a control forecast, even if the latter is run at higher horizontal resolution. It is argued that theadded benefits derive from 1) the fact that the ensemble provides a more detailed forecast probabilitydistribution, allowing the users to tailor their weather forecast...