ChainCatcher news, according to CoinDesk, a study by prediction market platform Kalshi found that prediction markets outperform Wall Street consensus expectations in inflation forecasting. Over a 25-month data period, their average error was 40% lower than consensus forecasts.
The study noted that the advantage of prediction markets lies in their aggregation of diverse information from numerous traders based on economic incentives, creating a “wisdom of the crowd” effect, thereby enabling more responsive reactions to changing conditions. These findings suggest that market-based predictions can serve as valuable supplementary tools for institutional decision-makers, especially during periods of high uncertainty.
Kalshi, by comparing inflation forecasts on its platform with Wall Street consensus expectations, found that market-based traders achieved higher prediction accuracy than traditional economists and analysts over a 25-month observation period, with this advantage being particularly pronounced during economic fluctuations.
Specifically, the study discovered that from February 2023 to mid-2025, prediction markets’ estimates for year-over-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 advantage of prediction markets was even more prominent, with their accuracy exceeding consensus expectations by up to 67%.
