Estimating the horizon of predictability in time-series predictions using inductive modelling tools

This paper deals with the assessment of how far into the future a time series can be safely predicted using inductive modelling and extrapolation techniques. Three different time series are used to demonstrate the viability of the approaches presented in the paper: one time series representing the water demand of the city of Barcelona, another characterizing the water demand of a section of the city of Rotterdam, and a third describing weather data for the city of Tucson. Fuzzy inductive reasoning ( FIR) is used to predict future values of these time series on the basis of their own past. FIR predictions come with two different built-in measures of confidence that can be used to obtain a quantitative estimate of how far into the future a time series can be predicted.