ABSTRACT. Methodological problems associated with forecasting water requirements by use of regression analysis are examined. Problems occurring when long‐range forecasts are based on linear and nonlinear extrapolation of time series models include possible changes in socioeconomic conditions, water allocation system structure, and limits to growth. Problems arising in forecasting based on multiple regression models are likely to involve serially dependent errors, multicollinear explanatory variables, and difficulties inherent to the presence of explanatory variables that must themselves be predicted.
Many difficulties exist in the matching of models with data. This paper identifies elements of this problem and discusses considerations involved in model evaluation. The well known multivariate linear regression model is used to illustrate the distinctions between accuracy and precision and between estimation and prediction (because the model is commonly misused.) No amount of additional data will improve the accuracy of a poor model. A high R 2 , while indicative of a good matching between the observed data and model estimates, is a poor criterion for judging adequacy of the model to make good predictions of future events. Model evaluation also includes the problem of introducing secondary data and proxy variables into a model. Secondary data frequently enter, for example, the mass, energy and water budget equations because of difficulties in measuring the primary variables. Proxy variables arise because of a desire to collapse a vector of incomparable values, say, of water quality into a single number. Review of the above issues indicates that model evaluation is a multi-criterion problem, often imbedded in a larger framework where models are intended to meet multiple objectives. The mismatch of models and data has increasing legal and social consequences.
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