Marketing Papers
Document Type
Journal Article
Date of this Version
October 1983
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.
Keywords
annual, financial forecasts, judgment vs. extrapolation, management vs. analyst, amalgamated forecasts
Recommended Citation
Armstrong, J. S. (1983). Relative Accuracy of Judgmental and Extrapolative Methods in Forecasting Annual Earnings. Retrieved from https://repository.upenn.edu/marketing_papers/78
Date Posted: 14 June 2007
This document has been peer reviewed.
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