Who should we trust? What is the credibility of official and unofficial experts? Aurélien Baillon, Professor of Economics of Uncertainty at Erasmus School of Economics, gives answers to these questions in a recently published article by Next Level Economics.
Experience is often measured by education and experience. According to Baillon however, this is only one way to approximate expertise. Baillon advocates for an alternative method to measure short term predictions: by scoring experts to measure and keep track of their prediction accuracy. Asking experts to make numerical predictions levels the playing field and makes it possible to compute an accuracy score, since experts will no longer be able to use rhetoric tricks to mask predictions.
Baillon argues that tracking accuracy is crucial, as to filter out fake experts who rely on pure luck. Baillon gives the following example: “Someone predicting a stock market crash every day for the following day, is bound to be right, one day.”
Baillon concludes that this alternative method may contribute on establishing more efficient short-term policies.