big data – BSE Voice

Two alumni launch Mont^2, a collaborative research lab

New research venture created by Francesco Amodio (Econ ’10), Giorgio Chiovelli (Econ ’11) and Serafín Frache

A pair of Barcelona GSE Alumni and their frequent co-author and friend have recently launched a new research centre to provide a platform for their vision of ideal research collaboration and to bring those learnings to a wider audience. This venture is Mont^2, the Montréal x Montevideo Econ Lab.

This initiative was not without its challenges despite appearing to be an easy path for a group of friends and co-authors from the outside. Its genesis happened just before the COVID-19 pandemic struck both Canada and Uruguay, where the founders are based (not to mention the rest of the world) forcing them to adapt their plans for the launch of a physical working group to an online one.

Francesco Amodio ’10 and Giorgio Chiovelli ’11 are Economics Program alumni and became firm friends after meeting as TA and student in an econometrics class. They began collaborating during their respective PhD’s, Francesco at UPF and Giorgio at Bologna in Italy. After graduating and starting their careers in Montréal and Montevideo respectively, they included a third member into their collaborative efforts, Serafín Frache, and started laying the groundwork for what would ultimately become Mont^2. Serafín had local knowledge of Uruguayan administrative data and its potential to answer exciting economic questions. From these roots, the three researchers began thinking about their long-term career plans and how they can make an impact on their communities and give back to their respective local communities and the wider academic and policy-world.

It is with this foundation that Mont^2 was created. The professors applied to Social Sciences and Humanities Research Council (SSHRC) for seed funding to utilise the unique Uruguayan data and begin building the infrastructure of Mont^2.

They also aim for the lab to structure the mentorship of the professors’ current and future pre-doctoral research assistants. This would give them the tools to work with big data and be prepared for their future careers where this skill is in demand, whether in academia or the private sector. The trio also want to bring attention to the role academic research has to play with policy-making institutions regardless of where they might be located.

Mont^2 has just been launched, but already they are hard at work on a handful of projects with RAs already enlisted. It is a working environment meant to provide a formalised structure to the growing network of researchers and collaborators that began with Francesco, Giorgio and Serafín but now stretching far beyond. The hope is for Mont^2 to strengthen their ties with policy institutions and begin to promote best practices when dealing with confidential government big data.

Connect with the founders

Francesco Amodio ’10 is an Associate Professor, McGill University. He is a co-founder of Mont^2 and an alum of the Barcelona GSE Master’s in Economics.

Giorgio Chiovelli ’11 is an Assistant Professor, Universidad de Montevideo. He is a co-founder of Mont^2 and an alum of the Barcelona GSE Master’s in Economics.

Serafín Frache is an Assistant Professor, Universidad de Montevideo. He is a co-founder of Mont^2.

This post was written by Maximilian Magnacca Sancho ’21 (ITFD) and edited by Ashok Manandhar ’21 (Economics).

Barcelona GSE Lecture – Using Internet Data to Understand Consumers and Markets

Lecture summary by masters students Hugo Kaminski ’15 and Yi-Ting Kuo ’15.

speaker

During the 31st Barcelona GSE Lecture, Professor Jonathan Levin, Holbrook Working Professor of Price Theory at Stanford University, discussed the advantages and challenges of using Internet commerce data for empirical research in economics.

Seller Experience – Let real online sellers run experiments for us

Economic research has long relied on public governmental institutions and organisations to collect empirical data, which are reliable but expensive. Data on the Internet could potentially be an alternative source as it can reduce the cost of varying parameters. However, it is also challenging to isolate specific effects as customization of products and services raises concerns about selection and endogeneity.

Prof. Levin and his collaborators found that the millions of listings on eBay could potentially serve as millions of small experiments with different seller choices. In collaboration with eBay, US data allowed them to run fixed effect regressions exploiting within-experiment variation in prices, fees, displays, and other parameters.

Auction and Demand – Never start with an intermediate price

The buyers market is very competitive. If an auction starts at a low price, the item will be highly sellable and the market will drive it to around 80% of its value. Starting at a high price will make the item harder to sell, but increases the probability of ending with a higher price. The resulting estimated demand curve was convex, which implies that for a seller to start an auction with either a low or high price is more profitable than an intermediate price.

As second example, Prof . Levin argued that the Internet market could be used to test behavioural hypotheses about consumers. By looking at the multiple auction listings with different (flat rate) shipping fees, their analysis suggests that people prefer free shipping so much that they are willing to pay a higher price for the goods with free shipping even if there is an equal good with lower total price including shipping costs.

By analysing Internet commerce data from 2003 to 2012, they observed the sellers’ learning curve and concluded that the demand for online auction has declined. One interpretation of this development could be that consumers grew accustomed to increasingly instant purchase options and tend to spend more time on other online activities thus losing the attention for online auction.

Sales tax – a problem across US states

In the United States there exists a sales tax of 8.875% on average among states for within state sales. It does not come as a surprise that the payment of this tax is viewed as a negative additional charge which online often appears just towards the end of the purchasing process. To analyse the impact of the ‘tax surprise’ Prof. Levin estimates the tax sensitivity by comparing purchase rates.

Prof. Levin’s research finds that both consumers and sellers are aware of this perceived “extra charge” and the fact that the tax does not apply on out-of-state sales. Their analysis finds two consumer trends: first there exists a preference for goods bought in geographic proximity; second, the rising item-level substitution which means the consumer chooses to buy the item from an out-of-state seller to avoid the tax. These two trends seem to form a paradox.

Professor Nezih Guner (right) with our speaker

On the seller side, Prof. Levin illustrates the case of Amazon and the location of their distribution centres. Amazon takes advantage of California’s geographic shape by locating its distribution centres just outside state lines while keeping delivery times short. This results in being able to cater to consumers in California without paying the sales tax.

Since online shopping is a growing trend, taxation legislation changes have potentially great impact. Based on the data used, a 1% increase in current sales tax decreases online sales by 1.5-2.0% but increase online home-state sales by 3-4%; alternatively switching to national tax collection of internet purchases would decrease online sales by 12%.

Professor Levin’s presentation concluded that new large-scale data offers an opportunity to assess microeconomic theories of behaviour and market operation. The presentation was followed by a Questions & Answers session on data quality, auction information asymmetry and lessons learned from use of auctions. For Yi-Ting Kuo and Hugo Kaminski it has been an insightful experience to listen to Professor Levin’s talk presented with support from Banco Sabadell.

If you are interested to know more about the lecture, you may view it here:

Renyi Hour: 3D and enhancing the user experience in (Big) Data visualization

Can big data be official? – Barcelona GSE Data Scientists

Originally posted by Stefano Costantini ’15 on the Barcelona GSE Data Scientists blog. Stefano is on Twitter @stefanoc.

Originally posted by Stefano Costantini ’15 on the Barcelona GSE Data Scientists blog. Stefano is on Twitter @stefanoc.

At the Renyi Hour on November 13th 2014, Frederic Udina gave a talk on big data and official statistics. Apart from being a professor at UPF and BGSE, Frederic is Director of IDESCAT, the statistical institute of Catalonia.

Frederic Udina presenting to BGSE Data Science students

In his talk, Frederic compared the “traditional” official statistics – slow to produce, with well-defined privacy limits and access rights – to “big data”, which is fast to produce, volatile and with fuzzy privacy limits. Frederic highlighted the tension between these two worlds, focusing particularly on the need for official statistics to become easier to collect, organise and customise to the need of the final user. In particular, Frederic identified the opportunity for IDESCAT (and other statistical institutes) to integrate the officially collected information with alternative information sources, such as:

Administrative data
Data freely available from the society
Data from private companies

Frederic outlined IDESCAT’s plan to move away from the current data generation system (the ‘stove pipe model’) which is slow, expensive and inefficient as it does not re-use information already collected, towards a fully integrated model (‘Plataforma Cerdà’) where any new information needs to be integrated with existing data.

Frederic noted that data is becoming increasingly important in society, and this is beginning to be recognised by official statistical institution. In particular, Frederic discussed the Royal Statistical Society’s Data manifesto where the RSS notes that data is:

A key tool for better, informed policy-making
A way to strengthen democracy and trust
A driver of prosperity.

The Royal Statistical Society Data Manifesto

Frederic also stressed the importance of confidentiality and privacy issues with regards to data availability. While it is desirable for some data to be freely available to the public, confidentiality and privacy should always be protected. However, it is important to strike the right balance between access and privacy, ensuring that while personal sensitive data is protected, important information is not prevented from being used in ways that may ultimately help the wider society. Personal health records are a classic example of this.

Frederic concluded his talk by providing some example of national statistical authorities integrating official statistics with widely available information to carry out new interesting analysis. Examples include:

Production of origin/destination arrays between territorial units (usually municipalities) for working or studying reasons using trajectories of mobile phones (ISTAT, New Zealand Statistics)
Using Google Trends to estimate/predict labour market, monthly forecast, small-area estimation (ISTAT)
Measuring use of TCI in firms, by using web scraping and text mining techniques

Useful links: