Comparing the Point Predictions and Subjective Probability Distributions of Professional Forecasters

Joseph Engelberg, Charles Manski and Jared Williams

No 11978, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use data from the Survey of Professional Forecasters to compare point forecasts of GDP growth and inflation with the subjective probability distributions held by forecasters. We find that SPF forecasters summarize their underlying distributions in different ways and that their summaries tend to be favorable relative to the central tendency of the underlying distributions. We also find that those forecasters who report favorable point estimates in the current survey tend to do so in subsequent surveys. These findings, plus the inescapable fact that point forecasts reveal nothing about the uncertainty that forecasters feel, suggest that the SPF and similar surveys should not ask for point forecasts. It seems more reasonable to elicit probabilistic expectations and derive measures of central tendency and uncertainty, as we do here.

JEL-codes: C42 E27 E47 (search for similar items in EconPapers)
Date: 2006-01
New Economics Papers: this item is included in nep-ets, nep-for and nep-mac
Note: EFG
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Citations: View citations in EconPapers (9)

Published as Engelberg, Joseph, Charles F. Manski and “Comparing the Point Predictions and Subjective Probability Distributions of Professional Forecasters." Journal of Business and Economic Statistics 165 (2009): 146-158.

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Journal Article: Comparing the Point Predictions and Subjective Probability Distributions of Professional Forecasters (2009)
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