The Perils of Working with Big Data and a Small Framework You Can Use to Avoid Them

Posted: 4 Jun 2021

See all articles by -

-

affiliation not provided to SSRN

Scott A. Brave

Federal Reserve Bank of Chicago

R. Andrew Butters

Indiana University

Multiple version iconThere are 2 versions of this paper

Date Written: December, 2020

Abstract

The use of “Big Data” to explain fluctuations in the broader economy or guide the business decisions of a firm is now so commonplace that in some instances it has even begun to rival more traditional government statistics and business analytics. Big data sources can very often provide advantages when compared to these more traditional data sources, but with these advantages also comes the potential for pitfalls. We lay out a framework called SMALL that we have developed in order to help interested parties as they navigate the big data minefield. Based on a set of five questions, the SMALL framework should help users of big data spot concerns in their own work and that of others who rely on such data to draw conclusions with actionable public policy or business implications. To demonstrate, we provide several case studies that show a healthy dose of skepticism can be warranted when working with and interpreting these new big data sources.

JEL Classification: C53, C55, C80, C81

Suggested Citation

- and Brave, Scott A. and Butters, R., The Perils of Working with Big Data and a Small Framework You Can Use to Avoid Them (December, 2020). FRB of Chicago Working Paper No. WP-2020-35, Available at SSRN: https://ssrn.com/abstract=3859836 or http://dx.doi.org/10.21033/wp-2020-35

- (Contact Author)

affiliation not provided to SSRN

No Address Available

Scott A. Brave

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

R. Butters

Indiana University ( email )

1309 E. Tenth St.
Bloomington, IN 47405
United States

HOME PAGE: http://https://kelley.iu.edu/BEPP/faculty/page14113.cfm?ID=46947

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
26
PlumX Metrics