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Discuss the problems of forecasting future trends in transport market (20).

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Introduction

Discuss the problems of forecasting future trends in transport market (20). Forecasting is estimating what the future demand for transport will be. Usually economics predict 3 variants of forecast: low, high and average. This is because there are a lot of uncertainties because some assumptions of forecast are based on a wide range of data. The forecast can be based on GDP figures, imports figures and past trends,etc. They look at those figures because the government or certain companies need to plan future spending decisions or to set new transport policy. Also, people use forecasts because they want to help transport planners meet future needs. However, there are a lot of problems which are caused by looking at these datas. ...read more.

Middle

Black market is not included there and the ?underground economy? has big figures as well. For example, people import cigarettes, alcohol, clothes, food from China in they ordinary transport suitcases. A lot of figures of black market are excluded from the imports data, therefore it becomes unreliable and inaccurate. And if somebody will base their forecast on imports data there main problem would be that the transport project would be inappropriate in real life even though figures said another thing. Money will be wasted on nothing useful. Last but not least, we base our forecast only on the past trends which do not include : just changed tastes/ fashion, population growth, technology development and new legal restrictions in current time. ...read more.

Conclusion

For example, the University of Chicago sent their student to collect the data of how many drugs, cigarettes are imported from another countries. Of course there is another problem: the forecast might be out of date as every day figures changes. But they will be approximately correct and appropriate. It is better than do not use any alternatives to make the data more reliable. Also, we could use much more data in order to make the forecast even more accurate but we have to be sure that these datas are accurate and not out of date. Despite the many problems, it would be a bigger problem if we would not use methods mentioned above. By using wider range of data and predicting the future demand for a shorter demand, we rescue ourselves of being completely wrong. ...read more.

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