(06-22-2023 12:05 PM)rawi Wrote: Namir wrote:
Quote:I got what you mean. Just so I can understand the mathematics behind that, in what way is this method not a forecast?
The point is that x influences y. Normally x can be set (e.g. advertising spendings, price) or you can wait for a certain x (if x is time) and then you get for this x a forecast of y with a mean (normally used as the forecast), an error distribution (normally assumed to be normally distributed with a standard deviation for which formulas exist). This error distribution is essential for a forecast. For example, from this you can get a 95% confidence interval for your forecast.
If you use a given value of y to estimate for which x you will get the mean forecast of this specific y you just get a single value for x, no distribution information, no standard deviation. Therefore it is not possible to compute a confidence interval. You cannot set y and then get x, it's vice versa.
Couldn't you just find the minimum and maximum values of x for which the given value of y falls within a 95% confidence interval? (Disclaimer: I am not a statistician.)
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