Social Econ Blog

... the media prefers pundits who get stuff wrong (because they are the same people who make the big predictions):

The basic idea was to solicit thousands of predictions from hundreds of experts about the fates of dozens of countries, and then score the predictions for accuracy. We find that the media not only fail to weed out bad ideas, but that they often favor bad ideas, especially when the truth is too messy to be packaged neatly.

The evidence falls into two categories. First, as the skeptics warned, when hordes of pundits are jostling for the limelight, many are tempted to claim that they know more than they do. Boom and doom pundits are the most reliable over-claimers.

Between 1985 and 2005, boomsters made 10-year forecasts that exaggerated the chances of big positive changes in both financial markets (e.g., a Dow Jones Industrial Average of 36,000) and world politics (e.g., tranquility in the Middle East and dynamic growth in sub-Saharan Africa). They assigned probabilities of 65% to rosy scenarios that materialized only 15% of the time. In the same period, doomsters performed even more poorly, exaggerating the chances of negative changes in all the same places where boomsters accentuated the positive, plus several more (I still await the impending disintegration of Canada, Nigeria, India, Indonesia, South Africa, Belgium, and Sudan). They assigned probabilities of 70% to bleak scenarios that materialized only 12% of the time.

Second, again as the skeptics warned, over-claimers rarely pay penalties for being wrong. Indeed, the media shower lavish attention on over-claimers while neglecting their humbler colleagues.

I am curious if, similar to what Glaeser argues with respect to beliefs, pundits do better and/or the media prefer "better" pundits for stories that are likely impose direct costs/benefits on their consumers.

(h/t Mark Thoma)