Expertise in forecasting performance of security analysts

In this study of sell-side analysts’ forecasts, we explore the effects of analyst aptitude, learning-by-doing, and the internal environment of the brokerage house on forecast accuracy. Our results indicate that analysts’ aptitude and brokerage house characteristics are associated with forecast accur...

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Bibliographic Details
Published in:Journal of accounting & economics 1999-11, Vol.28 (1), p.51-82
Main Authors: Jacob, John, Lys, Thomas Z., Neale, Margaret A.
Format: Article
Language:English
Subjects:
Accuracy
Analysts
Analysts’ forecasts
Capital market
Capital markets
Data analysis
Earnings forecasting
Evaluation
Financial information
Forecasts
Learning
Securities trading
Statistical analysis
Studies
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Summary:In this study of sell-side analysts’ forecasts, we explore the effects of analyst aptitude, learning-by-doing, and the internal environment of the brokerage house on forecast accuracy. Our results indicate that analysts’ aptitude and brokerage house characteristics are associated with forecast accuracy, while learning-by-doing is only associated with forecast accuracy when we do not control for analysts’ company-specific aptitude in forecasting. It is unlikely that this result is caused by measurement errors because it is robust when we use a sub-sample where we can accurately measure experience.
ISSN:0165-4101
1879-1980
DOI:10.1016/S0165-4101(99)00016-6