Prediction of imports of household appliances in Ecuador using LSTM networks

Abstract

Time series forecasting is an important topic widely addressed with traditional statistical models such as regression, and moving average. This work uses the state-of-the-art Long Short-Term Memory (LSTM) Networks to predict Ecuadorian imports of Home Appliances, and to compare the results against those obtained by traditional methods. First, an ARIMA model was used to forecast imports data. Then, the predictions were calculated by a Univariate LSTM network. The time series used in both experiments was the monthly average of imports from 1996 to April 2019. In addition, time series of GDP Growth, Population, and Inflation were included in the model to test prediction improvements. The performance of the models was assessed comparing the Mean Squared, Root Mean Square and Mean Absolute Error metrics. The results show that a LSTM network produces a better fit of the imports data and improved predictions compared against those produced by the ARIMA model. Furthermore, the use of multivariate time series (i.e., GDP Growth, Population, Inflation) data, for the LSTM model, did not produce significant improvements compared to the univariate imports time series.