Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/336589 
Year of Publication: 
2025
Series/Report no.: 
Discussion Paper No. 539
Publisher: 
Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition, München und Berlin
Abstract: 
Different methods of eliciting long-run expectations yield data that predict economic choices differently well. We ask members of a wide population sample to make a 10-year investment decision and to forecast stock market returns in one of two formats: they either predict the average of annual growth rates over the next 10 years, or they predict the total, cumulative growth that occurs over the 10-year period. Results show that total 10-year forecasts are more pessimistic than average annual forecasts, but they better predict experimental portfolio choices and real-world stock market participation.
Subjects: 
Household finance
long-run predictions
survey experiments
JEL: 
D01
D14
D84
D9
Document Type: 
Working Paper

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