OFFICE OF THE SECRETARY 

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DEPARTMENT OF THE AIR FORCE 

WASHINGTON 20330 

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27 December 1967 

MEMORANDUM FOR COLONEL WORTHMAN 

SUBJECT: Space Applications Summer Study 1967 Interim 

Report Volume 2 

The "Economic Benefits" are based on two major 

assumptions as stated in Appendix C: 

1. Forecasts of 5-14 day activity must be 

sufficiently accurate within an area encompassing one or, 

at most~ two average-sized counties. Comment: "Sufficient" 

accuracy is hard to define. As the letter from the Pennsylvania Power and Light Company pointed out, "the accuracy 

of these long-range weather forecasts must be investigated, 

since complete reliance on a long-range weather forecast and 

the resultant schedUling of maintenance could prove economically unsound and could be catastrophic to the system should 

these long-range weather forecasts be inaccurate by a factor 

of 1 or 2 days.tr This introduces an interesting conundrum -

how accurate should a weather forecast be? If it is very 

very accurate people will place more of their welfare in 

possible jeopardy should the forecast prove wrong. Thus, 

the result of a bad "very accurate" forecast might be a 

national disaster o If forecasts are not considered to be 

very accurate, people tend to distribute their losses and 

avoid catastrophe. Isn't it better to have wet feet most of 

the time if the alternative is to have dry feet but risk 

drowning? Any "hedging" action one may take establishes a 

situation exactly equivalent in economic benefit to having a 

less accurate forecast, except that you will have paid extra 

for the too accurate prediction. The point is~ it is insufficient to state that more accurate or longer term forecasts are of real value without showing the mechanism for 

using the forecasts which will produce value. If the mechanism must protect itself from occasional great losses then 

the cost of that insurance must be added to the cost of the 

improved forecast before a saving can be claimed. 

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The sounding system most strongly touted in 

the paper as a basis for the new forecasting capability is 

the multiple co-orbiter radio occultation system. Assuming 

that it works perfectly, it would produce data on a 400 km 

grid at time intervals of 6 to 12 hours. The time scale is 

appropriate to weather phenomena of the spacial scale represented by the 400 km grid o It is not reasonable to expect 

to produce highly accurate forecasts on a one-to-two-countysized scale from such grossly scaled data. Which points up 

a basic falicy in the synchronous-oribt-sensor syndrome - we 

do not need data more broadly integrated in space and time 

nearly so much as we need more specific measurements in 

terms of space, time and parameter o The measurements we 

need are extremely difficult to obtain by indirect sensing, 

and going 22,000 miles away doesn't help a bito 

2. The economic analysis is considered to be 

realistically conservative because all possible benefits 

weren't considered nor were those considered extrapolated 

world-wide. Comment: Convervative as estimates g01 yes; 

but realistic, no. The basis for the estimate of savings 

to the construction industry was a paper by John Russo of 

Travelers (results are immediately suspect based on bias 

alone). Russo said we could save$X per year if we had 5 

day forecasts of imperfect accuracy because we could save 

$ X per year if the presently available 24 hour forecasts 

y 

were used and a 5 day forecast is y times as useful as a one 

day forecast. The falicy is underlined and is the same one 

noted above. People simply won't (and probably shouldn't) 

place full faith in weather forecasts. It will never be 

possible to "recover" all the losses sustained by the construction industry because of imperfect use of forecasts -

the imperfect use of forecasts is that hedging operation we 

will always use when risk is high. The paper also adds a 

"saving" based on Russo's estimate of the value of a perfect 

24 hour forecast. This argument makes better sense to me. 

The observation systems pushed in the paper probably would 

improve short range forecasts (of large areas) and this could 

save money without inviting disaster if the forecast were bad. 

The estimated savings in agriculture seems 

reasonable to me, accepting the assumptions as stated earlier o 

They are based on the occurrence or avoidance o£ catastrophe -

hence the farmer can only gain, being totally committed anyway. (Unlike the Power Company or the Builder who can hedge 

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a forecast, the farmer either seeds or not, there is 

no advantage in half seeding, etc.). 

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Thomas O. Haig 

Colonel, USAF 

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