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Self-Selection and the Forecasting Abilities of Female Equity Analysts

Journal of Accounting Research, Forthcoming

Posted: 15 Nov 2007 Last revised: 6 Oct 2009

Alok Kumar

University of Miami - School of Business Administration

Date Written: October 1, 2009


This paper investigates whether there are systematic differences between the forecasting style and abilities of female and male analysts, and whether market participants recognize these differences. My key conjecture is that only female analysts with superior forecasting abilities enter the profession due to a perception of discrimination in the analyst labor market. Consistent with this conjecture, I find that female analysts issue bolder and more accurate forecasts and their accuracy is higher in market segments in which their concentration is lower. Further, the stock market participants are aware of the male-female skill differences. They respond more strongly to the forecast revisions by female analysts even though those analysts get less media coverage. The short-term market reaction is incomplete, however, because it is followed by a strong post-revision drift. The perception of abilities is similar in the analyst labor market where female analysts are more likely to move up to high-status brokerage firms, while their downward career mobility is lower. Collectively, these results indicate that female analysts have better-than-average skill due to self-selection and market participants are at least partially able to recognize their superior abilities.

Keywords: Female analysts, earnings forecasts, market reaction, career mobility, gender bias, media coverage, self-selection.

JEL Classification: G14, G24, J15, J16

Suggested Citation

Kumar, Alok, Self-Selection and the Forecasting Abilities of Female Equity Analysts (October 1, 2009). Journal of Accounting Research, Forthcoming. Available at SSRN:

Alok Kumar (Contact Author)

University of Miami - School of Business Administration ( email )

514 Jenkins Building
Department of Finance
Coral Gables, FL 33124-6552
United States
305-284-1882 (Phone)


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