CoinVoice recently learned that, according to CoinDesk, a study by the prediction market platform Kalshi found that prediction markets outperform Wall Street consensus expectations in inflation forecasting. Over a data period of 25 months, its average error was 40% lower than consensus forecasts.
The study pointed out that the advantage of prediction markets lies in their aggregation of diverse information from numerous traders based on economic incentives, forming a 'wisdom of the crowd' effect, allowing for a more sensitive response to changing environments. These findings suggest that market-based predictions can be a valuable supplementary tool for institutional decision-makers, especially during periods of high uncertainty.
Kalshi found that traders based on market predictions on its platform have a higher accuracy than traditional economists and analysts over a 25-month observation period, with this advantage being particularly significant during economic fluctuations.
Specifically, the study found that from February 2023 to mid-2025, the prediction market's estimates of year-on-year changes in the Consumer Price Index (CPI) had an average error 40% lower than consensus forecasts. When actual data deviated significantly from expectations, the advantages of prediction markets became even more pronounced, with accuracy exceeding consensus expectations by as much as 67%. [Original link]