Technology

Bloomberg Businessweek (Asia) - - TECHNOLOGY - The bot­tom line The gi­ants of the web are as­sem­bling teams of econ­o­mists that ri­val those at banks and uni­ver­si­ties.

2005 to de­velop al­go­rithms for es­ti­mat­ing home prices. When the hous­ing mar­ket started to crater, he emerged as a fa­vorite source for jour­nal­ists look­ing for data and com­men­tary. “At a time when you still had in­dus­try peo­ple say­ing ‘Yes, we’ve had some cor­rec­tion in prices, but there’s noth­ing to see here, move on,’ I’d be the guy who came out and said, ‘No, we’re go­ing to see an­other two years in hous­ing re­ces­sion; here’s why,’” says Humphries, whose cur­rent ti­tle is chief an­a­lyt­ics of­fi­cer and chief econ­o­mist. “We felt be­ing as ac­cu­rate as we could would gar­ner re­spect from con­sumers.”

Pub­lish­ing data-driven re­search has be­come a pop­u­lar strat­egy for web mar­ket­places and list­ings sites to show­case their depth of knowl­edge about a par­tic­u­lar in­dus­try. That in­cludes home ren­o­va­tion star­tups such as Houzz and BuildZoom, and jobs sites like In­deed and Glass­door. More data is gen­er­ally a good thing, says Bill McBride, who blogs about the hous­ing mar­ket at Cal­cu­lated Risk, but it pays to con­sider where it comes from and how it’s com­piled. “Some of the pri­vate data is garbage,” he says. “It’s not that the peo­ple pro­duc­ing it are not as smart or that they don’t do hard work. The mo­ti­va­tions are dif­fer­ent.”

In the early days of the data boom, tech com­pa­nies sought to en­tice big brains by al­low­ing them to keep one foot in academia, says Su­san Athey, a for­mer chief econ­o­mist at Mi­crosoft who now teaches at Stan­ford. Re­cently, Ama­zon has emerged as an ex­cep­tion to that rule, says Athey: It keeps a tight leash on re­search pro­duced by its in-house econ­o­mists. None­the­less, it’s man­aged to at­tract a team whose size and qual­ity ri­vals the eco­nomics de­part­ments of top uni­ver­si­ties, Athey says, in part be­cause the com­pany of­fers ac­cess to unique data. “I can’t run an ex­per­i­ment on a cou­ple of mil­lion peo­ple at Stan­ford. If you want to be aware of what in­ter­est­ing ques­tions are out there, you al­most have to go and work for one of these com­pa­nies.” Pa­trick Clark

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