Information for Clients
- Forecast Broker:
- Valmarpro Forecasting, Inc. acts as a broker or intermediary
between forecasters and potential clients. Clients may be business
firms, government agencies, or other entities.
- Motivated Forecasters:
- Forecasters are independent contractors, who are strongly motivated
financially to ensure the accuracy of their forecasts and estimates.
Valmarpro Forecasting uses the Lundgren forecasting incentives method,
which pays forecasters in accordance with the Value Marginal
Product (VMP) of the forecasts which they produce. Forecasters
stand to receive substantial variations in payment, depending on the
accuracy of their forecasts.
- VMP Incentive System:
- The Lundgren VMP incentive method has several desirable features,
including unbiased forecasts, efficient aggregation of information, and
appropriate elicitation of effort levels. The method may be used to
solicit forecasts or estimates for any observable or unobservable
variable value, including subjective values and probability estimates.
- Fields of Application:
- Possible applications of the Lundgren VMP forecasting incentives
method include prediction of future prices, quantities, and profits;
estimation of environmental externalities; estimates of regulatory
costs/benefits; business, financial, and mutual fund valuations,
including prediction of means and variances; macroeconomics; and other
specialties. Forecasts and estimates may be sought in any of the
sciences, including economics, political science, engineering, physics,
chemistry, biology, and interdisciplinary.
- Independent Forecasts:
- Forecasters are independent contractors, who supply their judgement
independently of the wishes and desires of both the client and Valmarpro
Forecasting. Valmarpro Forecasting will not accept any contract wherein
the client attempts to induce, by means of any influence, interference,
control, or incentive, the particular value or range of values for the
forecast or estimate.
- Pre-Forecast Consultation:
- In consultation with Valmarpro Forecasting, the client must
determine whether forecasters should have a particular skill set in a
particular field of study or specialization, or whether forecasters with
general statistical, economic, or financial abilities are acceptable.
The client must also determine a level of forecaster effort which is
both reasonable and desirable, and consult with Valmarpro Forecasting to
determine the level of forecaster compensation which is needed to
motivate that level of forecaster effort.
- Minimum Business:
- For a single forecast project, the VMP forecasting incentives
method is unlikely to be applied to any project of less than $10,000.
However, depending on the nature of the business, projects under $10,000
may be assigned to a single forecaster or firm on a non-incentive basis.
For repeated business, with the same or similar clients, the minimum
project size needed for the application of the VMP incentive method to a
single project can be lower.
- Contract Costs:
- Contract costs include both forecast preliminaries, as well as
post-forecast costs. Forecast preliminaries include such activities as
the collection and arrangement of relevant information (both
quantitative and qualitative) in a form suitable for further analysis.
Post-forecast costs include the communication of results, the payment of
forecasters, and the storage of information.
- Structure of Payments:
- Forecast preliminaries can be provided internally by the client, or
externally by a consultant to the client. Valmarpro Forecasting is also
willing to assist in these forecast preliminaries. Forecast
preliminaries provided by Valmarpro Forecasting will normally be charged
at cost plus a markup. The charge for post-forecast costs will normally
be fixed in advance.
- Additional Details:
- For additional information, please send your telephone number
and/or your mailing address to
ValMarPro Forecasting, Inc.
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