Power of Haas Ideas

Real-Time Policy

Data from online financial sites can improve policymaking

Measuring the nation’s economic health has long been a slow, costly, and imprecise exercise, but UC Berkeley researchers have helped develop a new way to measure real-time consumer behavior that could vastly improve economic policymaking.

Haas Professor of Economics Steve Tadelis, Berkeley Economics Professor Sachar Kariv, and researchers from the University of Michigan and Arizona State University examined more than 61 million transactions over 10 months of some 75,000 randomly selected users of the free mobile payments app Check.

They found that on average, an individual’s total spending actually rises substantially above their average daily spending the day a paycheck or Social Security check arrives and stays high for at least another four days. But that pattern occurs primarily with those constrained in their ability to borrow or by the interest rates they have to pay.

The researchers concluded that leaders considering how and when to stimulate the economy can do a better job choosing policies that match more exactly how individuals will respond. —Kathleen Maclay

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Professor Steve Tadelis Professor Steve Tadelis