Going Beyond GDP to Nowcast Well-Being Using Retail Market Data
One of the most used measures of the economic health of a nation is the Gross Domestic Product (GDP): the market value of all officially recognized final goods and services produced within a country in a given period of time. GDP, prosperity and well-being of the citizens of a country have been shown to be highly correlated. However, GDP is an imperfect measure in many respects. GDP usually takes a lot of time to be estimated and arguably the well-being of the people is not quantifiable simply by the market value of the products available to them. In this paper we use a quantification of the average sophistication of satisfied needs of a population as an alternative to GDP. We show that this quantification can be calculated more easily than GDP and it is a very promising predictor of the GDP value, anticipating its estimation by six months. The measure is arguably a more multifaceted evaluation of the well-being of the population, as it tells us more about how people are satisfying their needs. Our study is based on a large dataset of retail micro transactions happening across the Italian territory.
KeywordsGross Domestic Product Bipartite Network Sophistication Measure Revealed Comparative Advantage Seasonal Adjustment
We gratefully thank Luigi Vetturini for the preliminary analysis that made this paper possible. We thank the supermarket company Coop and Walter Fabbri for sharing the data with us and allowing us to analyse and to publish the results. This work is partially supported by the European Community’s H2020 Program under the funding scheme FETPROACT-1-2014: 641191 CIMPLEX, and INFRAIA-1-2014-2015: 654024 SoBigData.
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