Note on adjustments to analysts' earnings forecasts based upon systematic cross-sectional components of prior-period errors
Article Abstract:
A study is conducted to assess the performance of systematic components of cross-sectional forecast errors from previous years as a mechanism for altering current forecasts. It also seeks to determine the incremental usefulness of prior-period securities returns in minimizing forecast errors, with the systematic components of prior-period errors being controlled. The empirical results show that a considerable component of the cross-sectional mean square error in the earnings forecasts of analysts is systematic and that a significant amount of such systematic errors in current forecasts can be eliminated based upon prior-period error distributions. Findings also show that the accuracy of analysts' forecasts can be further improved by taking into account previous excess security returns.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1995
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A Study of Economists' Consensus Forecasts
Article Abstract:
Forecasts of macro-economic indicators are widely published and used by managers. A rigorous method to evaluate forecast reliability is presented. Concensus forecasts of ten economic indicators from 1947-1978 are studied. The results show that the economists' forecasts were not accurate throughout the period studied but they got better with time. Tables showing economists' forecasts relative to selected benchmarks for the ten economic indicators are included.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1983
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Averages of Forecasts: Some Emperical Results
Article Abstract:
Each method of generating forecasts gives different results. Any given method may provide information not provided by a different method, however. Thus aggregating results from different forecasting methods provides more information in the ultimate forecast than provided by a single method, Using the average of forecasts is better than a poor forecast. A good forecast provides minimal improvement at best. Graphs and tables illustrate computational results.
Publication Name: Management Science
Subject: Business, general
ISSN: 0025-1909
Year: 1983
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