This paper studies how security analysts use industry-level and firm-specific information in issuing firms' earnings forecasts. Analysts who use more (less) industry-level (firm-specific) information have less available resources and incentives to allocate effort towards costly firm-specific...

Motivated by models of rational inattention, we study the information choices of sell-side analysts who face attention constraints in acquiring and processing costly information. We empirically examine analysts' relative reliance on industry-level (i.e. macro) and firm-specific (i.e. micro)...