Measuring the decision support value of probabilistic forecasts
We shall introduce an extension of a proven measure of deterministic forecast skill, the Peirce Skill Statistic, which also applies to probabilistic forecasts. This skill statistic provides a way to directly compare the skill of a probabilistic forecast system and a deterministic forecast system. Using interpretations from decision theory, we shall show that the extended Peirce Skill Statistic is directly related to the value of the forecasts for decision support.
These ideas will be illustrated by examples of probabilistic forecasts for the SFO Marine Stratus Forecast System.