Forecasting vs Prediction: Difference and Comparison

Knowing about the future is one of the most intriguing aspects that mankind wants to figure out. The estimation of values and probabilities of favorable outcomes all concerning the future.

With the inculcation of the thought of prediction comes the concept of forecasting and prediction.

The 2 words mostly seem the same. They are not very complex, and in general terminology, most people confuse the 2 words with being the same. But they are very much different.

This is because their usage comes in different contexts.

Key Takeaways

1. Forecasting is estimating future trends based on past data and statistical analysis, while prediction involves making guesses about future events based on intuition and observation.
2. Forecasting is used in various fields, such as finance, economics, and weather forecasting, while prediction is used in sports, politics, and entertainment.
3. Forecasting provides a more reliable estimate of future events, while prediction is more subjective and can be influenced by personal biases.

Forecasting vs Prediction

The difference between forecasting and prediction is that forecasting is a branch of prediction. This is because forecasting concerns gathering past and present data to determine the outcomes for the future. Predictions are not always about the future, i.e., this is not bounded by any time, like past or present.

Comparison Table

Parameter of Comparison	Forecasting	Prediction
Concerning Factor	Forecasting revolves around future outcomes.	Prediction is not necessarily concerned about the future.
Data Gathered	Forecasting involves the gathering of past and present data to find future outcomes.	Predictions are not based on the past. Rather they give the possibility of the outcome.
Outcome	The outcomes, in this case, will be a future scenario based on the actions of the past.	The outcomes, in this case, are the logical analysis to estimate the happening of any event.
Logical	Forecasting finds out the logical outcome with the help of analysis based on the past and present.	Predictions can be illogical, and in some cases, they can be
Application	Forecasting is only applicable and useful in economic and meteorological fields.	Predication is applied in a majority of fields as long as there is a presence of a favourable or desired outcome.

What is Forecasting?

Forecasting is one method that involves properly analyzing a given data and then finding the outcome based on that analysis in the future.

For example, forecasting the impact of a meteor on Earth based on its speed and structure.

So, if we speak in general terms, it can be said that forecasting is the prediction of an outcome that will happen in the future based on the behavior and the facts in the past and the present.

It is a very beneficial method that is used in the field of economics and meteorology. Along with this, weather forecasting is also very popular among the people and hence, quite beneficial too.

What is Prediction?

Prediction is a method to explain the possibility of an event in the future. This means that it provides the chances of an outcome based on its favorability of it.

So, if there is an outcome, there will be a prediction.

The word is derived from the Latin word ‘pre,’ meaning before, and ‘dicer,’ meaning say. The usage of this method is widely known.

People involved in economic deals or company professionals are known to hire experts in times of uncertainty to predict the future.

Main Differences Between Forecasting and Prediction

1. Forecasting mainly revolves around future outcomes and hence, is considered the method to determine the results in the following days. Prediction, however, includes the future but is not limited to it. One can predict the outcomes of a certain situation that is happening or has happened.
2. Forecasting takes into account the past as well as the present to determine the future. This means that if an expert is asked to forecast the weather of a particular place, he or she will look at the current weather patterns and the weather patterns from the earlier weeks to ensure the weather pattern of the following day. If we talk about prediction, it is not related to the data of the past.
3. In the case of forecasting, the outcome will be a future event that can happen based on the analysis of the current day and the days that have passed. At the same time, the prediction will give the chances of the happening of a particular event at any point in time.
4. The forecasting analysis is more logical as compared to the prediction analysis. This means that prediction can be odd at times, and it is not necessary that it makes sense or is practically applicable. So, prediction involves running numbers, while forecasting also considers the practical implications.
5. Forecasting has found its usage in the field of meteorology and economics. Forecasting will be much more beneficial than predictions if an organization is in deep trouble and needs a helping hand in times of uncertainty. Predictions, on the other hand, can be used in almost any sector. It has a wide range of usage and, therefore, is implemented to a larger extent to determine the chances of a favorable condition. There will be a prediction as long as there is a favorable condition.

References

1. https://ui.adsabs.harvard.edu/abs/2004GMS…150..335J/abstract
2. https://psycnet.apa.org/record/1974-02325-001