Big Data and Recessions

When the pandemic hit, Opportunity Insights, a research and policy institute based at Harvard University, began to pursue a new data project they hope will revolutionize the way the U.S. tracks and defeats recessions. Essentially, the economists at Opportunity Insights are analyzing raw digital data on millions of customers, workers, taxpayers, and businesses to find solutions to rising inequality and declining upward mobility in America. 

Opportunity Insights was able to convince the businesses and government agencies that house big data to pipeline information to the team so they can analyze it, this information includes:

• Data on credit card spending from a company called Affinity Solutions

• Employment data from Earnin, Paychex, and Intuit

• Data on small business revenue from Womply

The data has allowed economists to laser in on who got hit the most by the spending drop, where different income level individuals are in terms of recovery, and if government aid, such as the Paycheck Protection Program, were actually beneficial to the economy. (I recommend reading the article for more specifics!)

With unemployment and business failures remaining high, and policymakers debating what will stimulate the economy, they have begun to turn to the Opportunity Insights team to get answers. In summary, Opportunity Insights has suggested targeted aid to those households and businesses that need it the most. An example of which, includes boosting and extending unemployment insurance benefits and awarding grants or low-income loans to businesses who are actually struggling. 

Opportunity Insights hopes in the future that its website, currently a prototype, will serve as official government statistics, helping to guide policymakers in making sound economic decisions. What benefit do you see Opportunity Insight having on the economy? What do you think of big data potentially being utilized by policymakers? 

https://www.npr.org/sections/money/2020/10/27/927842540/the-dark-side-of-the-recovery-revealed-in-big-data