Description Usage Arguments Details Author(s) References See Also Examples

Calculate Theil's U index of inequality.

1 |

`a` |
a numeric vector with the actual observed values. |

`p` |
a numeric vector containing the predictions. |

`type` |
defining the type of Theil's two U measures, see Details. Default is 2. |

`na.rm` |
logical, indicating whether |

Theil proposed two error measures, but at different times and under the same symbol U, which has caused some confusion.
U `type = 1`

is taken from Theil (1958, pp. 31-42). The argument `a`

represents the actual observations and `p`

the corresponding predictions. He left it open whether `a`

and `p`

should be used as absolute values or as observed and predicted changes.

Theil (1966, chapter 2) proposed U `type = 2`

as a measure of forecast quality: *"...where A_i and P_i stand for a pair of predicted and observed changes. ..."*

As

Andri Signorell <andri@signorell.net>

Theil, H. (1958): *Economic Forecasts and Policy*. Amsterdam: North Holland.

Thiel, H. (1966): *Applied Economic Forecasting*. Chicago: Rand McNally.

Bliemel, F. (1973): Theil's Forecast Accuracy Coefficient: A Clarification, *Journal of Marketing Research* Vol. 10, No. 4 (Nov., 1973), pp. 444-446

1 2 |

```
[1] 0.07512486
[1] 0.1611646
```

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