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Biased surveys

Author

Listed:
  • Gemmi, Luca
  • Valchev, Rosen

Abstract

We find empirical evidence that surveys of professional forecasters are biased by strategic incentives. First, we find that individual forecasts overreact to idiosyncratic information but underreact to common information. We show this is consistent with a model of strategic diversification incentives in forecast reporting where forecasters want to optimally “stand out” from the crowd, and thus report forecasts that exaggerate the agents’ true beliefs. Second, we show that no such biases are present in forecasts data that is not subject to strategic incentives. We also test further comparative statics that also confirm the strategic incentive model. Overall, we conclude that strategic reporting biases the inference an econometrician can draw on the true underlying expectations formation process, and the precision and heterogeneity in agents’ information sets, and lastly we show how to correct for this.

Suggested Citation

  • Gemmi, Luca & Valchev, Rosen, 2026. "Biased surveys," Journal of Monetary Economics, Elsevier, vol. 157(C).
    • Handle: RePEc:eee:moneco:v:157:y:2026:i:c:s0304393225001394
    DOI: 10.1016/j.jmoneco.2025.103868
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E70 - Macroeconomics and Monetary Economics - - Macro-Based Behavioral Economics - - - General

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