Eye in the Sky: Private Satellites and Government Macro Data

Abhiroop Mukherjee (), George Panayotov () and Janghoon Shon ()
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Abhiroop Mukherjee: Liwei Huang Associate Professor of Business, Department of Finance
George Panayotov: Associate Professor of Finance
Janghoon Shon: Ph.D. Candidate in Finance

No 2020-42, HKUST IEMS Thought Leadership Brief Series from HKUST Institute for Emerging Market Studies

Abstract: Relying on government announcements for macro information creates a potential conflict of interest and macro uncertainty. Many private entities have started using alternative data strategies to predict macro numbers. If alternative data strategies can work for macro predictions, we can get a sense of what is happening in the economy without having to rely on the government to inform us. We find a reduction in implied volatility and in price jumps in the U.S. crude oil market as a result of satellite-based inventory estimates. These findings point to a future in which the resolution of macro uncertainty is smoother, and governments have less control over macro information.

Keywords: Technology; Satellites; macro-economic data (search for similar items in EconPapers)
Pages: 4 pages
Date: 2020-09, Revised 2020-09
New Economics Papers: this item is included in nep-big and nep-ene
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