The up side of being down: Depression and crowdsourced forecasts

Sima Jannati, Sarah Khalaf and Du Nguyen

Journal of Banking & Finance, 2025, vol. 179, issue C

Abstract: This study examines the role of non-severe depression as a psychological anchor against overoptimism. Using earnings forecasts from Estimize, we find that an increase in the proportion of the U.S. population with depression is associated with improved forecast accuracy among users. This effect is concentrated among forecasts that are optimistic and analysts who take longer time to issue forecasts, highlighting reduced optimism and slow information processing as economic mechanisms that explain our results. We also show that this effect is distinct from the influence of temporary seasonal depression or other sentiment measures on decision-making. Overall, our research establishes a link between depression and crowdsourced financial evaluations

Keywords: Non-severe depression; Crowdsourced earnings forecasts; Forecast accuracy; Cognition; Estimize (search for similar items in EconPapers)
JEL-codes: G00 G24 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:179:y:2025:i:c:s0378426625001463

DOI: 10.1016/j.jbankfin.2025.107526

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