Testing the Rational Expectations Hypothesis on the Retail Trade Sector Using Survey Data from Malaysia

Chin-Hong Puah, Lucy Chong and Mohamad Jais

MPRA Paper from University Library of Munich, Germany

Abstract: The rational expectations hypothesis states that when people are expecting things to happen, using the available information, the predicted outcomes usually occur. This study utilized survey data provided by the Business Expectations Survey of Limited Companies to test whether forecasts of the Malaysian retail sector, based on gross revenue and capital expenditures, are rational. The empirical evidence illustrates that the decision-makers expectations in the retail sector are biased and too optimistic in forecasting gross revenue and capital expenditures.

Keywords: REH; Unbiasedness; Non-serial Correlation; Weak-form Efficiency (search for similar items in EconPapers)
JEL-codes: C12 C22 D84 L81 (search for similar items in EconPapers)
Date: 2011-10
New Economics Papers: this item is included in nep-for and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Journal of International Business and Economics 4.11(2011): pp. 214-218

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:36699

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