# How do I interpret MRAE (Accuracy measure)?

Can somebody explain to me how I would interpret the result of the MRAE.

In my textbook the MRAE is defined as followed:

$$MRAE= {1 \over n}\left(\sum_{t=1}^n \left|{e_t \over e_t^*}\right|\right)$$

with $$e_t=\text{actual value}-\text{forecasted value}$$ and $$e_t^*$$ being the benchmarking method where $$e_t^*=e_{t-1}$$.

Now consider these simple example: Example 1: | actual | forecast | error | |--------|----------|---------| | 10 | 5 | 5 | |8 | 4 | 4 | |20 | 10| 10|

this would result in $$MRAE= {1 \over 2}\cdot\left({4 \over 5}+{10 \over 4}\right)=1,65$$

Example 2: | actual | forecast | error | |--------|----------|---------| | 10 | 1 | 9 | |8 | 1 | 7 | |20 | 1| 19|

this would result in $$MRAE= {1 \over 2}\cdot\left({7 \over 9}+{19 \over 7}\right)=1,75$$

Now what does this tell me? Am I 65% (75% respectively) better than the benchmarking method? And if so, what does that tell me about the actual forecasting method?