Publications
Publications
  • July 1999
  • Article
  • Journal of Accounting & Economics

Analysts' Forecast Accuracy: Do Ability and Portfolio Complexity Matter

By: Michael B. Clement
  • Format:Print
  • | Pages:19
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Abstract

Prior studies have identified systematic and time persistent differences in analysts’ earnings forecast accuracy, but have not explained why the differences exist. Using the I/B/E/S Detail History database, this study finds that forecast accuracy is positively associated with analysts’ experience (a surrogate for analyst ability and skill) and employer size (a surrogate for resources available), and negatively associated with the number of firms and industries followed by the analyst (measures of task complexity). The results suggest that analysts’ characteristics may be useful in predicting differences in forecasting performance, and that market expectations studies may be improved by modeling these characteristics.

Keywords

Analysis; Forecasting and Prediction; Performance Evaluation; Experience and Expertise

Citation

Clement, Michael B. "Analysts' Forecast Accuracy: Do Ability and Portfolio Complexity Matter." Journal of Accounting & Economics 27, no. 3 (July 1999): 285–303.

About The Author

Michael B. Clement

Accounting and Management
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