I recently finished reading Fooled by Randomness and have been enamored with Monte Carlo simulations. I recently, as a pilot, tried to simulate spending of New York State County Sheriff department spending.
I used data published by the Office of the State Comptroller which has spending by chart of account codes. I sampled all year over year spending and used it to project spending 5 years out. I ran 10,000 simulations and compared my results to the actual results.
The jury is still out on this one. I can say that the further out you get the less reliable the simulations are (which I think is wonderful). I can also say that the Monte Carlo simulation doesn’t work equally well for all account codes. I still have some tweaking to do before making anything public. But is has definitely been educational.