Distribution Truth and Consequences in the Forecasting of Headcount Growth
Forecasting the growth rate of an organization’s headcount is sufficiently difficult that real estate strategy is frequently constructed on the basis of flat growth or simple compounded growth models. By ignoring this issue or the arguments that might stem from constructing a more sophisticated model we are assured of only one thing: our forecasts will be uninformed and potentially dangerous. This paper examines the statistical properties of headcount growth data and argues for a more rigorous approach based on stable distributions and Monte Carlo simulation.
