On the relationship between Clayton's skill score and expected value for forecasts of binary events

Abstract

Following upon previous efforts to associate standard measures of forecast skill to relative economic value, the connection is established between the Clayton skill score and the range of users who realise positive value from the forecasts. It is also shown that, whereas the maximum relative value that can be obtained from a set of forecasts is based on the probabilities conditioned on the observations, the range of users for whom the forecasts provide positive relative value is based on the probabilities conditioned on the forecasts.