Analyst Forecast Accuracy: Do Ability, Resources and Portfolio Complexity Matter?

Posted: 21 Jul 1997

See all articles by Michael B. Clement

Michael B. Clement

University of Texas at Austin - Department of Accounting

Date Written: May 1997

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 IBES 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.

JEL Classification: G29, M41

Suggested Citation

Clement, Michael B., Analyst Forecast Accuracy: Do Ability, Resources and Portfolio Complexity Matter? (May 1997). Available at SSRN: https://ssrn.com/abstract=8545

Michael B. Clement

University of Texas at Austin - Department of Accounting ( email )

2110 Speedway, Stop B6400
Austin, TX 78712
United States
512-471-0332 (Phone)
512-471-3904 (Fax)

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