Measuring Long-Run Expectations that Correlate with Investment Decisions

Peter Haan, Chen Sun, Felix Weinhardt and Georg Weizsäcker

No 2130, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: Different methods of eliciting long-run expectations yield data that predict economic choices differently well. We ask members of a wide population sample to make a 10-year investment decision and to forecast stock market returns in one of two formats: they either predict the average of annual growth rates over the next 10 years, or they predict the total, cumulative growth that occurs over the 10-year period. Results show that total 10- year forecasts are more pessimistic than average annual forecasts, but they better predict experimental portfolio choices and real-world stock market participation.

Keywords: Household finance; long-run predictions; survey experiments (search for similar items in EconPapers)
JEL-codes: D01 D14 D84 D9 (search for similar items in EconPapers)
Pages: 16 , Anh. p.
Date: 2025
New Economics Papers: this item is included in nep-exp and nep-for
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Related works:
Working Paper: Measuring Long-Run Expectations that Correlate with Investment Decisions (2025)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp2130

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