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Big Data in the National Accounts

Experience in the United States

Brent MoultonAdvisory Expert Group on National Accounts

Washington, DC

9 September 2014

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What are big data?

▪ Wikipedia: “Any collection of data sets so large and complex that it becomes difficult to process using… traditional data processing applications.”

▪ IBM: “Every day we create 2.5 quintillion bytes of data… This data comes from everywhere… This is big data.”

▪ Forbes: “12 big data definitions: what’s yours?” # 11 – “The belief that the more data you have, the

more insights and answers will arise automatically from the pool”

# 12 – “A new attitude… that combining data from multiple sources could lead to better decisions.”

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Big data and official statistics

▪ Statistical agencies as producers of big data Consistency in format and presentation Catalogued in common, machine-readable format Accessible in bulk Desirable to make government data available on a

single platform

▪ Big data as source data for national accounts Administrative data, especially micro-data Data from private sources Web scraping

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Concerns about using big data

▪ Do the concepts match those needed for national accounts?

▪ How representative are the data? Selection biases

▪ Is it possible to fill the gaps in coverage?

▪ Do the data provide consistent time series and classifications?

▪ How timely are the data?▪ How cost effective?

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Defined-benefit pension funds

▪For the SNA’s new treatment of defined-benefit pensions, BEA found it useful to work with administrative micro-data filed by pension funds “Form 5500” data from Pension Benefit

Guaranty Corporation ~ 45,000 records per year covering

98% of private pension funds BEA had to edit data to remove data

errors and anomalies

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Private source data for early estimates

▪ For “advance” GDP estimate (release about 30 days after the end of the quarter), official monthly/quarterly indicators are not always available

▪ Examples of private source data used by BEA: Ward’s/JD Powers/Polk (auto

sales/price/registrations) American Petroleum Institute (oil drilling) Air Transport Association of America (airlines) Variety magazine (motion picture admissions) Smith Travel Research (hotels and motels) Investment Company Institute (mutual fund sales)

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Health care satellite account

▪ Schultze Commission (At What Price? 2002) recommended that health care price indexes should be based on cost of treating a specific diagnosis

▪ BEA is preparing a health care satellite care (http://www.bea.gov/national/health_care_satellite_account.htm) One approach uses insurance claims data for

several million insured individuals Claims grouped in disease episodes Allows comparison of change in cost for treating

particular diseases

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Local area tracking system

▪ Used by BEA’s regional accounts staff for independent data on regional economies

▪ Used to vet official statistics before publishing

▪ Types of data Employment data: largest employers, principal

industries, recent layoffs Natural events affecting the economy Local real estate and financial trends

▪ Automated using web scraping methods Identifying key word searches Archiving relevant articles

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BEA research on depreciation

▪ Identifying depreciation in the presence of obsolescence is a long-standing issue

▪ BEA research on motor vehicle depreciation proposes to address this problem using data on “build dates,” which can differ from model years

▪ Data scraping – VIN-level data from decodethis.com combined with auction data from NADA and data from other auto websites

▪ Goal is improved estimates of depreciation

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Conclusions

▪ Big data will become increasingly important

▪ Priority to improving data quality, filling gaps, and keeping up with changing economy

▪ Big data especially useful for research projects

▪ Big data may allow for more timely or higher frequency estimates

▪ Attention must continue to be paid to traditional data quality issues

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