Data & drivers

Exogenous variable

Also called covariate

In forecasting jargon, exogenous means 'coming from outside the target series.' Price, weather, and marketing spend are typical. The word does not make the variable good. Availability at forecast time does.

Economists contrast exogenous with endogenous (variables the system also explains). In applied demand work, people mostly mean 'extra regressor.' If you find yourself in a debate about endogeneity, you may have left the warehouse.

Treat the label as a reminder: this input is not a lag of the target. You must pipeline it separately, and you must know whether next week's value is known, assumed, or itself a forecast.

Weather is the textbook case. So is a price you set. Yesterday's demand is not exogenous. Calling it that in a slide will not make the lag honest.