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| Main Authors: | , , |
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| Format: | Preprint |
| Published: |
2025
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| Subjects: | |
| Online Access: | https://arxiv.org/abs/2512.23847 |
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Table of Contents:
- We develop a statistical test to detect lookahead bias in economic forecasts generated by large language models (LLMs). Using state-of-the-art pre-training data detection techniques, we estimate the likelihood that a given prompt appeared in an LLM's training corpus, a statistic we term Lookahead Propensity (LAP). We formally show that a positive correlation between LAP and forecast accuracy indicates the presence and magnitude of lookahead bias, and apply the test to two forecasting tasks: news headlines predicting stock returns and earnings call transcripts predicting capital expenditures. Our test provides a cost-efficient, diagnostic tool for assessing the validity and reliability of LLM-generated forecasts.