The DOI matches its Crossref record.
Are Financial Analysts' Forecasts of Corporate Profits Rational?
Open accessAbstract
This paper develops generalized method‐of‐moments tests for the rationality of earnings per share forecasts made by individual stock analysts. We fail to reject the hypothesis of rationality as long as we take into account two complications: (1) the correlation in a given period of analysts' forecast errors in predicting earnings for firms in the same industry and (2) discretionary asset write‐downs, which affect earnings but are intentionally ignored by analysts when they make earnings forecasts. Our results challenge earlier work by De Bondt and Thaler and by Abarbanell and Bernard that found irrationality in analysts' forecasts.
Overview
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Integrity signals
Registry
Cites
Statistics
Verification
Claims the paper makes
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Self-check
Percentages, sums and reported differences re-computed from the paper’s own numbers.
The self-check needs the paper’s full text.
Citations
Cited by
Representativeness revisited: Attribute substitution in intuitive judgment.
Kahneman, D., & Frederick, S. (2002) · Heuristics and Biases · doi:10.1017/cbo9780511808098.004 · Cited by 3,476
Earnings Management to Exceed Thresholds
Degeorge, F., Patel, J., & Zeckhauser, R. (1999) · The Journal of Business · doi:10.1086/209601 · Cited by 2,751
Slovic, P., Finucane, M., Peters, E., & MacGregor, D. G. (2002) · Heuristics and Biases · doi:10.1017/cbo9780511808098.025 · Cited by 2,349
Rationality and Analysts' Forecast Bias
Lim, T. (2001) · The Journal of Finance · doi:10.1111/0022-1082.00329 · Cited by 1,012
Investor psychology in capital markets: evidence and policy implications
Daniel, K., Hirshleifer, D., & Teoh, S. H. (2002) · Journal of Monetary Economics · doi:10.1016/s0304-3932(01)00091-5 · Cited by 759
Metadata
- Authors
- Keane, M. P., & Runkle, D. E.
- Venue
- Journal of Political Economy
- Publisher
- University of Chicago Press
- Published
- 1998-08
- Volume
- 106
- Issue
- 4
- Pages
- 768-805
- ISSN
- 0022-3808 (ISSN-L)
- 1537-534X
- OpenAlex
- W2133350325
- Cited by
- 235
- References
- 0
- FWCI
- 35.87
- Type
- journal article
- Language
- en
- Open access
- green
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
How to cite
Cite CoChat for the checks on this page, and the paper for its own findings.
- This page
- CoChat. (2026). Citation check: Are Financial Analysts' Forecasts of Corporate Profits Rational? https://app.cochat.ai/papers/10.1086/250029
- The paper
- Keane, M. P., & Runkle, D. E. (1998). Are Financial Analysts' Forecasts of Corporate Profits Rational? Journal of Political Economy. https://doi.org/10.1086/250029
Data sources
Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
