Relative Accuracy of Judgmental and Extrapolative Methods in Forecasting Annual Earnings

Loading...
Thumbnail Image
Penn collection
Marketing Papers
Degree type
Discipline
Subject
annual
financial forecasts
judgment vs. extrapolation
management vs. analyst
amalgamated forecasts
Funder
Grant number
License
Copyright date
Distributor
Related resources
Contributor
Abstract

This paper identifies and analyzes previously published studies on annual earnings forecasts. Comparisons of forecasts produced by management, analysts, and extrapolative techniques indicated that: (1) management forecasts were superior to professional analyst forecasts (the mean absolute percentage errors were 15.9 and 17.7, respectively, based on five studies using data from 1967-1974) and (2) judgmental forecasts (both management and analysts) were superior to extrapolation forecasts on 14 of 17 comparisons from 13 studies using data from 1964-1979 (the mean absolute percentage errors were 21.0 and 28.4 for judgment and extrapolation, respectively). These conclusions, based on recent research, differ from those reported in previous reviews, which commented on less than half of the studies identified here.

Advisor
Date Range for Data Collection (Start Date)
Date Range for Data Collection (End Date)
Digital Object Identifier
Series name and number
Publication date
1983-10-01
Journal title
Volume number
Issue number
Publisher
Publisher DOI
Journal Issue
Comments
Postprint version. Published in Journal of Forecasting, Volume 2, Issue 4, October 1983, pages 437-447. Publisher URL: http://dx.doi.org/10.1002/for.3980020411
Recommended citation
Collection