The Rôle of Statistics in Business Forecasting

Abstract

In any large group of social scientists-such as the one meeting here this evening-widely divergent attitudes toward business forecasting are certain to be represented. At one extreme will be the view that business forecasting, though doubtless an unavoidable phase of the conduct of practical affairs, has as yet no scientific standing. According to this view, business forecasting when given scientific form is to be regarded as a sort of malpractice, not without its adherents and for the time being distinctly lucrative, but certainly not entitled to recognition by legitimate scientific practitioners. At the other extreme will be the opinion that in business forecasting is found one of the most valuable lines of endeavor in the entire field of social science-a line in which realism, objectivity, and adequacy of treatment are compelled by the very nature of the problems encountered; a line in which weaknesses of procedure are most mercilessly exposed and high standards of performance most effectively enforced. In between these extreme views will lie attitudes ranging all the way from mild skepticism on the one hand to benign and hopeful interest on the other. Clearly there is no consensus of opinion as to the place business forecasting should be assigned in the evolving program of social science. Into this diversity of opinion at least one proposition may be profitably projected: Statistics and business forecasting have effected connections which are not likely to be speedily broken. It is unnecessary to determine here which one of the two made the first approaches; nor is it worth while to scrutinize the motives which led to the union. Doubtless there are those who will regard the affair as a marriage of convenience, dictated by obvious pecuniary advantages; but that need not concern us at the present time. The important fact