Editing Forecasting (section)

===Average approach===

In this approach, the predictions of all future values are equal to the mean of the past data. This approach can be used with any sort of data where past data is available. In time series notation:

:<math>\hat{y}_{T+h|T} = \bar{y} = ( y_1 + ... + y_T ) / T </math> <ref name="otexts.org">{{cite book|chapter-url=https://www.otexts.org/fpp/2/3|chapter=2.3 Some simple forecasting methods |publisher=OTexts |title=Forecasting: Principles and Practice |first1=Rob J |last1=Hyndman |first2=George |last2=Athanasopoulos |access-date=16 March 2018 |url-status=live |archive-url= https://web.archive.org/web/20170813151321/https://www.otexts.org/fpp/2/3 |archive-date= Aug 13, 2017 }}</ref>

where <math>y_1, ... , y_T</math> is the past data.

Although the time series notation has been used here, the average approach can also be used for cross-sectional data (when we are predicting unobserved values; values that are not included in the data set). Then, the prediction for unobserved values is the average of the observed values.