Reporting Biases and Survey Results: Evidence from European Professional Forecasters

34 Pages Posted: 17 Dec 2007

See all articles by Juan A. Garcia

Juan A. Garcia

European Central Bank (ECB)

Andres Manzanares

European Central Bank (ECB)

Date Written: December 2007

Abstract

Using data from the ECB's Survey of Professional Forecasters, we investigate the reporting practices of survey participants by comparing their point predictions and the mean/median/mode of their probability forecasts. We find that the individual point predictions, on average, tend to be biased towards favourable outcomes: they suggest too high growth and too low inflation rates. Most importantly, for each survey round, the aggregate survey results based on the average of the individual point predictions are also biased. These findings cast doubt on combined survey measures that average individual point predictions. Survey results based on probability forecasts are more reliable.

Keywords: Point estimates, subjective probability distributions, Survey of Professional Forecasters (SPF)

JEL Classification: C42, E31, E47

Suggested Citation

Garcia, Juan Angel and Manzanares, Andres, Reporting Biases and Survey Results: Evidence from European Professional Forecasters (December 2007). ECB Working Paper No. 836, Available at SSRN: https://ssrn.com/abstract=1032546 or http://dx.doi.org/10.2139/ssrn.1032546

Juan Angel Garcia (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Andres Manzanares

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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