better living through meteorology mark s. roulston oxford university and london school of economics
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Better Living Through Meteorology Value of weather forecasts weather impacts the economy forecasts have skill out to over a week and this horizon will increase how can forecasts benefit the economy?TRANSCRIPT
Better Living Through Better Living Through MeteorologyMeteorology
Mark S. RoulstonMark S. RoulstonOxford University and Oxford University and
London School of EconomicsLondon School of Economics
Better Living Through Meteorology Better Living Through Meteorology
Economic impacts of weatherEconomic impacts of weather
• severe weather events biggest cost to insurance companies
• in U.K. 1OC drop in temperature increases electricity demand by over 200 MW
• modest anomalies as important to the economy as severe weather events
Better Living Through Meteorology Better Living Through Meteorology
Value of weather forecastsValue of weather forecasts
• weather impacts the economy• forecasts have skill out to over a week and
this horizon will increase
• how can forecasts benefit the economy?
Better Living Through Meteorology Better Living Through Meteorology
Better Living Through Meteorology Better Living Through Meteorology
How much soup should I make?How much soup should I make? CP = cost price of 1 bowl of soup SP = selling price of 1 bowl of soup Q = amount of soup I should make
stop making soup when…. expected marginal income = marginal cost
Prob(demand>Q) x SP = CP
choose Q so that Prob(demand>Q) =CP/SP
Better Living Through Meteorology Better Living Through Meteorology
a probability forecast is required for rational decision making
Better Living Through Meteorology Better Living Through Meteorology
Better Living Through Meteorology Better Living Through Meteorology
Better Living Through Meteorology Better Living Through Meteorology
Better Living Through Meteorology Better Living Through Meteorology
Better Living Through Meteorology Better Living Through Meteorology
Better Living Through Meteorology Better Living Through Meteorology
Better Living Through Meteorology Better Living Through Meteorology
Better Living Through Meteorology Better Living Through Meteorology
when averaging ensembles you should average utility, not weather variables
Better Living Through Meteorology Better Living Through Meteorology
Bank of England issues inflation and
GDP growth forecasts as fan-charts.
Better Living Through Meteorology Better Living Through Meteorology