The value of probabilistic prediction

Probabilistic forecasts designed to estimate the probability density function of forecast states are potentially more valuable than single forecasts because (1) they can predict not only the most likely outcome but also the probability of occurrence of extreme and rare events and (2) probabilistic forecasts issued on consecutive days are usually more consistent than corresponding single forecasts. In this communication, the potential economic value of probabilistic and single forecasts are compared, and single and probabilistic forecasts of precipitation for a flooding event are analyzed to illustrate the potential value of consistency between successive forecasts.