Eye in the sky: private satellites and government macro data

Abhiroop Mukherjee (), George Panayotov () and Janghoon Shon ()
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Abhiroop Mukherjee: Department of Finance, The Hong Kong University of Science and Technology.
George Panayotov: Department of Finance, The Hong Kong University of Science and Technology.
Janghoon Shon: Department of Finance, The Hong Kong University of Science and Technology.

No 2019-68, HKUST IEMS Working Paper Series from HKUST Institute for Emerging Market Studies

Abstract: We develop an approach to identify whether recent technological advancements – such as the rise of commercial satellite-based macroeconomic estimates – can provide an effective alternative to government data. We measure the extent to which satellite estimates are affecting the value of government macro news using the asset price impact of scheduled announcements. Our identification relies on cloud cover, which prevents satellites from observing economic activity at a few key hubs. Applying our approach, we find that some satellite estimates are now so effective that markets are no longer surprised by government announcements. Our results point to a future in which the resolution of macro uncertainty is smoother, and governments have less control over macro information.

Keywords: Alternative data; Satellite Imagery; Asset price impact; Macroeconomic Estimates (search for similar items in EconPapers)
JEL-codes: E44 G14 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2019-10, Revised 2019-10
New Economics Papers: this item is included in nep-big and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:hku:wpaper:201968

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