Depression and Forecast Accuracy: Evidence from the 2010 FIFA World Cup

Before and during the 2010 Soccer World Cup, participants made probabilistic forecasts of the outcomes of the tournament. We examine the relationship between their depression levels and their performance at this forecasting task. Across two different waves of predictions and with multiple measures and components of prediction accuracy, we find that depressed forecasters were less accurate. The poorer accuracy amongst the more depressed forecasters was primarily driven by a neglect of base rate probabilities: the depressed participants assigned probabilities that departed from the base rates more substantially, particularly for low base rate events. Given the high incidence of depression in the workforce, the importance of judgmental probabilistic forecasting in many settings, and the fact that we may be the first to look at the depression-accuracy relationship using a real-world prediction task involving exogenous uncertainty, these findings may have important implications for both theory and practice.