Economist of the year
The Economist of the Year Competition was hosted for several decades by South Africa’s leading media company, Media24. However, during 2021 Media24 decided to relinquish this prestigious competition due to internal restructuring, and operational changes. At the time of withdrawing as competition host, the Bureau of Market Research (Pty) Ltd (BMR) was approached by Media24 to annex the competition. Due to the prestigious nature of the competition, the transfer of the ownership of the competition to the BMR was supported by well renowned economists who have for many years competed in the event on an annual basis. The key rationale for the support for the continuance of the competition is because the competition has for long occupied the centre stage of economic thinking and growth projections in the country.
BMR & UNISA SOCIAL COMPACT
Given the strategic position of the BMR in the Unisa Corporate Group structure, the Unisa Executive Management Committee in 2022 adopted the co-branding of the Economist of the Year (EoY) Competition. Thus, ever since 2022, the EoY trademark has collectively been co-branded by Unisa and BMR in support of sustainable development and to promote economic growth, predictions and debates in South Africa.
STRATEGIC VALUE PROPOSITION
Why an economist of the year competition?
- Public benefit: To provide up-to-date economic forecast information to society.
- Business benefit: To contribute to economic information required by businesses for decision-making and strategic planning purposes.
- Academic benefit: To encourage the development of more accurate and more robust economic forecasting methods.
- Policy benefit: To have updated economic forecast information available as inputs to economic (including developmental, monetary and fiscal) policy formulation in South Africa.
- Marketing benefit: To market the economic profession to society at large.
- Personal benefit: To encourage healthy competition and discourse between economists.
The timely predictions for the leading economic indicators by the Economist of the Year (EoY) competition serve to provide economic forecasts of greatest likelihood which are of great value in informing business and investment decisions in South Africa. Also, the relevance of the Economist of the Year Competition is soundly routed in goal 8 of the United Nations (UN) Sustainable Development Goals (SDGs), which aims to promote sustainable economic growth. Sustained and inclusive economic growth is a prerequisite for sustainable development, which can contribute to improved livelihoods for people. Economic growth can lead to new and better employment opportunities and provide greater economic security for all. Moreover, rapid growth, especially among the least developed and developing countries, can help reduce the wage gap relative to developed countries, thereby diminishing glaring inequalities between the rich and poor.
Since 2022 the BMR has taken ownership of the EoY competition being governed, managed, and operated as follows:
- The management of the competition: This entails sending out monthly requests to the participating economists to submit updated economic forecasts.
- Collating and analysing the monthly forecasts: After the monthly forecasts are obtained, the different forecasts are collated and analysed to determine ‘consensus’ scores on all eight forecasted variables.
- Adjudication of the competition: An independent adjudication panel monthly consolidates the economic forecasts and will finally identify a winner whose annual average predictions vary least from the annual official economic data published by the relevant agencies.
- Celebrating the competition and appoint a winner: Following the adjudication process a EoY event is organised during which the annual winner of the competition will be announced. Two award categories are used, namely the “Seasoned” and “Young” Economist of the Year. The winner receives the reward.
- Preparing monthly competition and competition winner press releases. Following the collation and analysis of monthly submitted forecasts by the independent adjudication panel, press releases are issued to the media. Similarly, a press release will also be issued when the winner is announced.
- Any economist or economic analyst (based on qualifications and profession) residing in South Africa can enter the competition.
- This is an individual competition, therefore multiple entrants from the same company or organisation are allowed.
- There are no entry fees.
- It is the responsibility of economists/analysts to enter the competition. The organiser is not obliged to enter any previous contestants.
- Participating economists need to submit forecasts on a monthly basis, failing which the previous month’s forecasts will be considered as still being relevant.
- Deadlines for monthly predictions is set for the first Friday of the month for which the prediction is submitted.
- An Excel spreadsheet with all the participants’ predictions will monthly be e-mailed to participants.
- Participants who fail to submit predictions may be disqualified from the competition.
- By entering the competition, participating economists agree to the use of forecasts for media and research purposes.
- The adjudication results of the adjudicator panel are final. Following the adjudication process a winner will be announced in May of the following year.
STRUCTURE OF THE COMPETITION
Since its inception, the structure of the competition has remained largely unchanged. Participants enters the competition at the start of the year and submit their predictions for a number of prescribed economic variables. Economic forecast figures are monthly updated by each participant. The first forecast at the start of the year is made without guidance or “benchmarks”. For subsequent months the organiser (BMR) sends each participant a spreadsheet with all the participants’ forecasts for the previous month, together with the ‘consensus forecast’ (which is defined as the mean of all the submitted values) for each variable. Participants are then asked to submit an updated set of predictions. Participants do not have to explain why they have updated their forecasts. In fact, no written explanations for the forecasts are ever submitted to the BMR. When the adjudication panel performs the calculations to determine the winner of the competition, the “consensus forecast” is treated as a participant.
The winner of the competition is determined by means of a formula that has remained unchanged since the competition’s inception. For each variable and each participant, a weighted squared error is calculated as follows:
where Fi is month i’s forecast, A is the actual value, and Mi are weightings for each month (first month = 11, second month =10,…, last month = 1).
The rationale for the decreasing weights is that the EoY adjudicator panel penalises errors at the start of the year (when there is more uncertainty) more heavily than errors at the end of the year. Thus, a forecaster who is able to predict the variable more accurately at the start of the year, is being advantaged by the formula, compared to a forecaster who may be quite accurate at the end of the year, but whose forecast errors at the start of the year were larger.
For each variable, the weighted squared errors are ranked from lowest to highest between the participants. Thus, if there are 30 participants, the one with the lowest weighted squared error is ranked 1 and the one with the highest weighted squared error is ranked 30. The rankings for each variable are subsequently added together across the various variables. The participant with the lowest sum of the combined rankings is announced the “Economist of the Year”.
The Adjudication Panel obtains most of the data against which the forecasts are measured from the March issue of the Reserve Bank’s Quarterly Bulletin of the following year. Where variables tend to be subject to official revisions in subsequent editions of the Quarterly Bulletin, these revisions are not considered in determining the winner.