Text as Data Real-time Measurement of Economic Welfare

Document pages: 22 pages

Abstract: Economists are showing increasing interest in the use of text as an input toeconomic research. Here, we analyse online text to construct a real time metricof welfare. For purposes of description, we call it the Feel Good Factor (FGF).The particular example used to illustrate the concept is confined to data fromthe London area, but the methodology is readily generalisable to othergeographical areas. The FGF illustrates the use of online data to create ameasure of welfare which is not based, as GDP is, on value added in amarket-oriented economy. There is already a large literature which measureswellbeing happiness. But this relies on conventional survey approaches, andhence on the stated preferences of respondents. In unstructured online mediatext, users reveal their emotions in ways analogous to the principle ofrevealed preference in consumer demand theory. The analysis of online mediaoffers further advantages over conventional survey-based measures of sentimentor well-being. It can be carried out in real time rather than with the lagswhich are involved in survey approaches. In addition, it is very much cheaper.