The Data Revolution and Economic Analysis
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Many believe that “big data” will transform business, government and other aspects of the economy. In this article we discuss how new data may impact economic policy and economic research. Large-scale administrative datasets and proprietary private sector data can greatly improve the way we measure, track and describe economic activity. They also can enable novel research designs that allow researchers to trace the consequences of different events or policies. We outline some of the challenges in accessing and making use of these data. We also consider whether the big data predictive modeling tools that have emerged in statistics and computer science may prove useful in economics.
We thank Susan Athey, Preston McAfee, Erin Scott, Scott Stern and Hal Varian for comments. We are grateful for research support from the NSF, the Alfred P. Sloan Foundation, and the Toulouse Network on Information Technology.
This paper draws on some of my experience in related work that used proprietary data from various companies, which were obtained through contracts that I and my coauthors signed with each of these companies (eBay Research, Alcoa, Safeway, and a subprime lender).Jonathan Levin
Levin consulted in 2010-11 for eBay Research, and has consulted for other internet companies, and for the US government. He has received research funding from the Alfred P. Sloan Foundation, the National Science Foundation, and the Toulouse Network on Information Technology.