NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Joseph Engelberg

Rady School of Management
University of California at San Diego
Otterson Hall, Room 4S154
9500 Gilman Drive #0553
LaJolla, CA 92093-0553

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NBER Working Papers and Publications

January 2006Comparing the Point Predictions and Subjective Probability Distributions of Professional Forecasters
with Charles F. Manski, Jared Williams: w11978
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 centr...

Published: 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. citation courtesy of

 
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