Collecting data that is transactional (credit card transactions or GPS locations) as opposed to aspirational (tweets or Facebook status) increases the information value of each observation, said Roberto Rigobon, Professor, MIT Sloan School of Management, at the second Suresh Tendulkar Memorial Lecture organised by the Reserve Bank of India.
In his lecture on ‘Big Data and Measurement: From Inflation to Discrimination’, the MIT professor said: “The biggest advantages of organic data are that they are non-intrusive and the individual tends to be truthful in the data generation.
“We do not lie to our GPS, or to Google, or try to manipulate Netflix. We leave a truthful bread crumb of our lives. I do not want to overstate, though. This is not the case for all data sources.”
For example, people do not show who they are on Facebook, they show who they would like to be. Still, it is informative about the person’s ambitions, but not about what they are. So, there is a difference in the truthfulness that varies by their degree of aspiration versus transactions in the data source.
“The biggest advantage of the organic (big) data is its truthfulness. Not its size, speed, variety, etc. It is the fact that people tend to answer in a truthful way, what I think makes this data unique.
“In this regard, collecting data that is transactional as opposed to aspirational increases the information value of each observation. So, credit card transactions or GPS locations are far more meaningful that tweets or Facebook status,” explained Rigobon.
He elaborated that organic data is not ordered along geography or socio-economic conditions. It is organised by behaviour.
“We have been collecting surveys for millenniums (literally) by paying attention to geography and social conditions, statistical offices have that paradigm as a guiding framework to understand the economy and society. I think this view will be challenged,” he said.