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Dr. Robert Wuertz
May 17, 2018
New Wine in New Bottles? The Fermentation of Behavioral Economics in PFM
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Introduction
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What’s DRM?
What’s it got to do with wine?
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Overview
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Is use of behavioral economics new?
Is big data new?
Where big data breaks out
Predictions: where is this taking us?
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What can we expect from behavioral economics?
Is behavioral economics new?
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Guatemala study
Evidence from El Salvador
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• Historical example of big data • Computer Assisted Mass Appraisal
• Exploratory data analysis
Is big data new?
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How big data can strengthen behavioral economics?
Predictive data mining
Could it help in Guatemala?
And from there?
The IRS foreshadows the future
Where big data breaks out: traditional
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IRS • Internal data bases, • Commercial sources
(Facebook, MySpace, YouTube)
Sources of data
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Jamaica • Internal data bases • Telecommunications
data
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Sources of data
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IRS uses big data for: • Charting and analyzing social media
• Targeting audits by matching tax filings to social media or electronic
payments
• Tracking individual Internet addresses and emailing patterns
• Sorting data in 32,000 categories of metadata and 1 million unique “attributes”
• Machine learning across “neural” networks
• Statistical and agent-based modeling
• Relationship analysis based on Social Security numbers
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Other sources of data: Mobile devices
Software logs
Radio-frequency identification readers, and
Wireless sensor networks
Where big data breaks out: fiscal space
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Indonesia
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• How the financial industry uses big data
The private sector foreshadows the future
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• Privacy • Ethical issues
The downside of big data
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Is behavioral economics new wine? What’s the vote?
Big data can inform behavioral economics
And the future is…
Conclusions
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Questions?
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