The advent of big data is already allowing for better measurement of economic effects and outcomes and is enabling novel research designs across a range of topics. Over time, these data are likely to affect the types of questions economists pose, by allowing for more focus on population variation and the analysis of a broader range of economic activities and interactions. We also expect economists to increasingly adopt the large-data statistical methods that have been developed in neighboring fields and that often may complement traditional econometric techniques.
These data opportunities also raise some important challenges. Perhaps the primary one is developing methods for researchers to access and explore data in ways that respect privacy and confidentiality concerns. This is a major issue in working with both government administrative data and private sector firms. Other challenges include developing the appropriate data management and programming capabilities, as well as designing creative and scalable approaches to summarize, describe, and analyze large-scale and relatively unstructured data sets. These challenges notwithstanding, the next few decades are likely to be a very exciting time for economic research.
Economics in the age of big data
Liran Einav, Jonathan Levin
Science 7 November 2014:
Vol. 346 no. 6210
Via Complexity Digest