This is going to get a bit more technical than many of my other posts. However, I am a big believer that there is no reason to shy away from complexity, particularly when avoiding it sacrifices accuracy. So we are going to discuss forecast performance for sales tax in North Dakota. There are many different ways to evaluate forecasts and the one I will use here is called a tracking signal.
So I told my forecasting students I would post what I taught them today. I project monthly ND oil prices forward to the end of 2016. The following graph is the result of this process.