19 April 2022 ~ 0 Comments

Complex Networks in Economics Satellite @ NetSci22

For NetSci22, I will join forces once again with the great Morgan Frank to bring you the second edition of the “Complex Networks in Economics and Innovation” satellite (post and official website of the first edition).

Once again, we’re looking for contributed talks, giving you an opportunity to showcase your work. Topics that are more than welcome include:

  • Mapping the relationship of complex economic activities at the global, regional, and local level;
  • Tracking flows of knowhow in all its forms;
  • Creating networks of related tasks and skills to estimate knockoff effects and productivity gains of automation;
  • Investigating the dynamics of research and innovation via analysis of patents, inventions, and science;
  • Uncovering scaling laws and other growth trends able to describe the systemic increase in complexity of activities due to agglomeration;
  • In general, any application of network analysis that can be used to further our understanding of economics.

The submission link is: https://easychair.org/my/conference?conf=cnei22. The full call text is here. And this is the official website. You should send a one-page one-figure abstract before May 13th, 2022.

We have a fantastic lineup of invited speakers you’ll mingle with:

The event will be held online on Zoom. The organization details are still pending confirmation, but we should have secured the date of July 18th, 2022. We should start at 8AM Eastern time (2PM Europe time) and have a 6-hour program. This could still change, so stay tuned for updates!

I hope to see your abstract in my inbox and then you presenting at the satellite!

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08 June 2021 ~ 0 Comments

Program for Networks in Economics Satellite @ Networks21 Conference

This year, I’ll be organizing a satellite event at the Networks21 conference, the major 2021 event bringing together all network scientists — merging the Sunbelt and the NetSci crowds for the first time! The satellite will be about network applications on research about economic development and innovation. The most excellent Morgan Frank and Lingfei Wu are the other engines behind this project. I briefly introduced it in this earlier post.

I’m glad to report that now we have a final roster of participants. We received several abstracts for the contributed talks and we managed to squeeze eight of them in our program. What follows is the current schedule — minor changes might happen due to author constraints and I will try to keep this post up to date. Note that the satellite will happen Wednesday, June 30, 2021, and all times reported are US East coast time.

  • 8:30AM Invited I: Lü Linyuan
  • 9:10AM Invited II: R. Maria del Rio-Chanona
  • 9:50AM Contributed I: Process-driven network analysis of a mobile money system in Asia. Carolina Mattsson and Frank Takes.
  • 10:10AM Contributed II: Discovering industries in networks of words. Juan Mateos-Garcia, Bishop Alex and Richardson George.
  • 10:30AM Break
  • 10:50AM Invited III: Yong-Yeol “YY” Ahn
  • 11:30AM Contributed III: From code to market: Network of developers and correlated returns of cryptocurrencies. Lorenzo Lucchini, Laura Maria Alessandretti, Bruno Lepri, Angela Gallo and Andrea Baronchelli.
  • 11:50AM Contributed IV: What is a Labor Market? Classifying Workers and Jobs Using Network Theory. James Fogel and Bernardo Modenesi.
  • 12:10PM Invited IV: Hyejin Youn
  • 12:50PM Lunch Break
  • 1:30PM Invited V: Esteban Moro
  • 2:10PM Invited VI: Marta Gonzalez
  • 2:50PM Contributed V: How to Govern Facebook. Seth Benzell and Avinash Collis.
  • 3:10PM Contributed VI: The network limits of infectious disease control via occupation-based targeting. Demetris Avraam, Nick Obradovich, Niccolò Pescetelli, Manuel Cebrian and Alex Rutherford.
  • 3:30PM Break
  • 3:50PM Invited VII: Daniel Rock
  • 4:30PM Contributed VII: Measuring Fraudulent Transactions On Complex Economic Networks Using Optimality Gap. Danilo Bernardineli and Wenjia Hu.
  • 4:50PM Contributed VIII: Local connections drive global structure for technological innovation. Dion O’Neale, Demival Vasques Filho and Shaun Hendy.
  • 5:10PM Invited VIII: Jiang Zhang

If you want to attend, you need to register to the Networks21 conference (deadline on June 20th) and then you will receive a Zoom link to the event.

I don’t know about you, but I’m very excited to see all of this! The official page of the satellite has more information for you.

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15 March 2021 ~ 0 Comments

Networks in Economics Satellite @ Networks21 Conference

This year’s NetSci conference will be special. For the first time it will be held jointly with the other major network event of the year: Sunbelt, or the main network conference for social sciences. I could not miss an opportunity like this, and so I decided to organize a satellite event with the excellent Morgan Frank and Lingfei Wu. The topic of the satellite will be network applications on research about economic development and innovation.

We’re looking for contributors to send an abstract about their work in the area. If you’re unsure about what area that is, think about my research on the Product Space, or on the impact of business travel on economic growth, or economic convergence in Colombia, etc. Specifically, if you are interested in issues like:

  • Mapping the relationship of complex economic activities at the global, regional, and local level;
  • Tracking flows of knowhow in all its forms;
  • Estimating the relatedness of tasks and skills to estimate knockoff effects and productivity gains of automation;
  • Investigating the dynamics of research and innovation via analysis of patents, inventions, and science;
  • Uncovering scaling laws and other growth trends able to describe the systemic increase in complexity of activities due to agglomeration;

and you study them using networks and the tools of the science of complex systems, then you really should send us your abstract. The submission link is: https://easychair.org/my/conference?conf=cnei21. You should send a one-page one-figure abstract before May 5th, 2021.

We have a fantastic lineup of invited speakers you’ll mingle with:

The event will be held online on Zoom. The exact date is still to be determined, but it will be between June 21st and July 3rd. So stay tuned for updates! You should bookmark the official website of the satellite, to get fresh news about it: https://mrfrank8176.github.io/Complex-Networks-in-Economics-and-Innovation/

I hope to see your abstract in my inbox and then you presenting at the satellite!

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21 June 2019 ~ 0 Comments

NetSci 2019 Report

NetSci is a conference bringing together everybody interested in network science every year. As usual, I showcase the things that most impressed me during my visit. The usual disclaimer applies: I am but a man[citation needed] and NetSci has so many parallel sessions. If I didn’t mention your talk, chances are that’s because I couldn’t duplicate myself to attend!

Starting from the keynote/plenary talks, I think the one standing our for me this year was Eleanor Power. She presented her field work on the cohesive role played by religion in India. By means of network analysis, she showed that indeed there are some strong effects in the social wiring associated with attending or not attending monthly and seasonal celebrations. This is absolutely superb research not only because it is a great application of network analysis to the real world, nor because it goes beyond the study of WEIRD (Western Educated Industrialized Rich Democratic) culture. It also speaks to me deeply, given my interest in the powerful role memes and culture play in shaping the astounding success — and, possibly, the future apocalyptic failure — of human beings as a species. Think about the best of Joe Henrich, Slate Star Codex, and The Elephant in the Brain all wrapped up in the neat package of a 40 minutes talk.

The Erdös-Rényi prize, awarded to a prominent network scientist under 40, went to Tiago Peixoto. It’s difficult to choose the best among all the great contributions Tiago gave to the field. Since I have a soft spot for practical advances — I’m a computer scientist at heart, after all –, I’m going to mention that Tiago is the engine behind the graph-tool library. graph-tool includes a variety of network algorithms and it’s wicked fast.

Rather than crowning career achievements as the Erdös-Rényi prize, the Euler award goes to a specific discovery. The first awardee was Raissa D’Souza for her discovery of the properties of explosive percolation. This is a big deal, because it shows that a certain class of transitions in network can be abrupt. Think about the collapse of a power grid: you certainly don’t want that to happen at the failure of a single link. Yet, Raissa proved that there are scenarios in which that can happen: failures can propagate without noticeable effects for a while until BAM!: you’re screwed.

And, since we’re talking about prestigious prizes, I shouldn’t forget the Zachary Karate Club Trophy, going to the first researcher including the Zachary Karate Club network in their presentation. The competition gets hotter and hotter at every conference. The new trophy holder is Emma Towlson.

The dinner banquet was special and touching. Emily Bernard shared her experience and inquiry into American culture. You should really check out her book Black is the Body. Sometimes we need a reminder that, when we perform social network analysis, our nodes are actual people. They have dreams, fears and hopes, they’re alive and active human beings. Emily did well in reminding us about that.

Concluding the part about plenary events: lighting talks. It’s getting tiring every year mentioning Max Schich, but the format really suits him like a glove. He’s truly a Herzog in a sea of Al Gores. Al Gore is great, but sometimes your really need something that stands out. Max talked about the origin of network science, reconnecting it not to Euler, but to Leibniz.  Far from being nitpicking, this is just the starting point of the broader adventure into the creation myths of different branches of science and culture. The talk was a sample of the first chapter of his “Cultural Interaction” book and, in case you were wondering, yes: I think you should read it (once it gets out).

Yours truly was at NetSci with the mission of spreading the word about his paper Functional Structures of US State Governments, a collaboration with Laszlo Barabasi, Steve Kosack, Ricardo Hausmann, Kim Albrecht and Evann Smith. If you want to read more about it, you can check my previous post.

As for the contributed talks that caught my eye? Here is a brief summary:

“The hidden constraints on worker mobility” by Morgan Frank. Morgan analyzed data from O-Net, connecting occupations with the skills they require. He showed there are topological constraints that make it hard for people to retrain out of their occupations. (Why would they want to? Oh, I don’t know, maybe because we’re automating and delegating everything to our new AI overlords?)

“Finding Over- and Under-represented Pathways in Higher Order Networks” by Tim Larock. This was only one of a series of talks about higher order networks. Higher order dynamics means dynamics “with memory”: the next state of your system doesn’t depend only on the current state, but also on an arbitrarily long window into the past. Think about passengers in a flight network: the abundance of connecting flights makes it unlikely for paths like A -> B -> A to happen. Tim showed some neat ways to deal with these situations.

“Scale-free Networks Well Done” by Ivan Voitalov. Just like Petter Holme, I’m a sucker for well-executed steak puns in paper titles. Ivan presented a new chapter over the controversy on how to fit power law degree distributions and whether scale free networks are truly as ubiquitous as some of us believe. Ivan provided some evidence leaning on the “yes” side. I’m eager to see what’s next from the other camp.

“Quantifying Data Bias in the U.S. Justice System” by Xindi Wang. Xindi presented an analysis of predictive errors you can get when applying machine learning algorithms to support decision tasks such as predicting recidivism, estimating the risk of child abuse, and more. This was a nice extension to Tina Eliassi-Rad‘s excellent plenary talk about machine learning ethical issues.

With this, I bid you farewell. See you soon in Rome, home of NetSci 2020!

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22 May 2017 ~ 0 Comments

Netonets @ Netsci17: Program

As previously announced, this year’s edition of the Netonets event will happen again as a satellite of NetSci. The conference will take place in Indianapolis. The general program of the conference can be found here: http://netsci2017.net/program. I will be there, hosting the satellite just like last year. It will take place Tuesday, June 20th and it will run for the entire day.

We have just completed a tentative program. We are going to have four great invited speakers: Marta C. Gonzales, Romualdo Pastor-Satorras, Gareth Baxter and Paul Hines. We also have five contributed talks. You can find the first draft of the program down here, subject to change in case of conflicting schedules for any of the participants. I will keep up to date in case that happens.

Looking forward to see you in Indianapolis!

Session I

9:00 – 9:15: Room set up
9:15 – 9:30: Welcome from the organizers
9:30 – 10:15: Invited I: Marta Gonzales: “Coupled networks of mobility and energy”

10:15 – 10:45: Coffee Break

Session II

10:45 – 11:30: Invited II: Gareth Baxter: “Critical dynamics of the interdependent network transition”
11:30 – 11:50: Contributed I: Dana Vaknin, Michael Danziger and Shlomo Havlin: “Spreading of localized attacks in spatial multiplex networks”
11:50 – 12:10: Contributed II: Ivana Bachmann and Javier Bustos-Jiménez: “Seven years of interdependent network’s robustness”

12:10 – 14:00: Lunch Break

Session III

14:00 – 14:45: Invited III: Romualdo Pastor-Satorras: “Effects of temporal correlations in social multiplex networks”
14:45 – 15:05: Contributed III: Zhiwei Yang, Jichao Li, Danling Zhao, Yuejin Tan and Kewei Yang: “Operation Loop based Structural Robustness of Combat Networks of Weapon System-of-systems”
15:05 – 15:25: Contributed IV: Shawn Gu and Tijana Milenkovic: “From Homogeneous to Heterogeneous Network Alignment”
15:25 – 15:45: Contributed V: Louis Shekhtman, Michael Danziger, Ivan Bonamassa, Sergey Buldyrev, Vinko Zlatic and Shlomo Havlin: “Secure message passing in networks with communities”

15:45 – 16:10: Coffee Break

Session IV

16:10 – 16:55: Invited IV: Paul Hines: “Increasing interconnectivity between networks can increase network robustness”
16:55 – 17:30: Round table – Open discussion
17:30 – 17:45: Organizers wrap up

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21 February 2017 ~ 0 Comments

Netonets @ NetSci 2017: Call for Contributions!

We are delighted to invite submissions for

Network of Networks
7th Edition – Satellite Symposium at NetSci2017

taking place in JW Marriott Indianapolis, Indiana, United States,
on June 20th, 2017.

Submission:
We invite you to submit a 300 word abstract including one descriptive figure using our EasyChair submission link:
https://easychair.org/conferences/?conf=netonets2017

Deadline for submission: April 21st, 2017.
Notification of acceptance will be sent out by April 28th, 2017.

Further Information at: http://www.netonets.org/events/netonets2017

Abstract:
For the seventh time, it is our pleasure to bring together pioneer work in the study of networks of networks. Networks of networks are networks in which the nodes may be connected through different relations, are part of interdependent layers and connected by higher order dynamics. They can represent multifaceted social interactions, critical infrastructure and complex relational data structures. In our call, we are looking for a diversity of research contributions revolving around networks of networks of any kind: in social media, in infrastructure, in culture. We are particularly keen in receiving works raising novel issues and provocative queries in the investigation of networks of networks, as well as new contributions tackling these challenges. How do networks of networks change the paradigm of established problems like percolation or community detection? How are we shifting our thoughts to be ready for this evolution? Running parallel to NetSci, the top network science conference, this event provides a valuable opportunity to connect with leading researchers in complex network science.

Confirmed Keynote:

Marta Gonzales – MIT
Gareth Baxter – University of Aveiro
Romualdo Pastor-Satorras – Universitat Politècnica de Catalunya
Paul Hines – University of Vermont (UNCONFIRMED)

The final program will strive for the inclusion of contributions from different research fields, creating an interdisciplinary dialogue about networks of networks.

Best regards,
The Netonets organizers,

Antonio Scala, La Sapienza – antonio.scala.phys@gmail.com
Gregorio D’Agostino, ENEA – gregorio.dagostino@enea.it
Michele Coscia, Harvard University – michele_coscia@hks.harvard.edu
Przemysław Kazienko, Wroclaw University of Technology – przemyslaw.kazienko@pwr.edu.pl

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09 June 2016 ~ 0 Comments

Netsci 2016 Report

netsci1

Another NetSci edition went by, as interconnected as ever. This year we got to enjoy Northeast Asia, a new scenario for us network scientists, and an appropriate one: many new faces popped up both among speakers and attendees. Seoul was definitely what NetSci needed at this time. I want to spend just a few words about what impressed me the most during this trip — well, second most after what Koreans did with their pizzas: that is unbeatable. Let’s go chronologically, starting with the satellites.

You all know I was co-organizing the one on Networks of networks (you didn’t? Then scroll down a bit and get informed!). I am pleased with how things went: the talks we gathered this year were most excellent. Space constraints don’t allow me to give everyone the attention they deserve, but I want to mention two. First is Yong-Yeol Ahn, who was the star of this year. He gave four talks at the conference — provided I haven’t miscounted — and his plenary one on the analysis of the Linkedin graph was just breathtaking. At Netonets, he talked about the internal belief network each one of us carries in her own brain, and its relationship with how macro societal behaviors arise in social networks. An original take on networks of networks, and one that spurred the idea: how much are the inner workings of one’s belief network affected by the metabolic and the bio-connectome networks of one own body? Should we study networks of networks of networks? Second, Nitesh Chawla showed us how high order networks unveil real relationships among nodes. The same node can behave like it is many different ones, depending on which of its connections we are considering.

yy1

Besides the most awesome networks of networks satellite, other ones caught my attention. Again, space is my tyrant here, so I get to award just one slot, and I would like to give it to Hyejin Youn. Her satellite was on the evolution of technological networks. She does amazing things tracking how the patent network evolved from the depths of 1800 until now. The idea is to find viable innovation paths, and to predict which fields will have the largest impact in the future.

When it comes to the plenary sessions, I think Yang-Yu Liu stole the spotlight with a flashy presentation about the microcosmos everybody carries in their guts. The analysis of the human microbiome is a very hot topic right now, and it pleases me to know that there is somebody working on a network perspective of it. Besides scientific merits, whoever extensively quotes Minute Earth videos — bonus points for it being the one about poop transplants — has my eternal admiration. I also want to highlight Ginestra Bianconi‘s talk. She has an extraordinary talent in bringing to network science the most cutting edge aspects of physics. Her line of research combining quantum gravity and network geometry is a dream come true for a physics nerd like myself. I always wished to see advanced physics concepts translated into network terms, but I never had the capacity to do so: now I just have to sit back and wait for Ginestra’s next paper.

netsci2

What about contributed talks? The race for the second best is very tight. The very best was clearly mine on the link between mobility and communication patterns, about which I showed a scaling relationship connecting them (paperpost). I will be magnanimous and spare you all the praises I could sing of it. Enough joking around, let’s move on. Juyong Park gave two fantastic talks on networks and music. This was a nice breath of fresh air for digital humanities: this NetSci edition was orphan of the great satellite chaired by Max Schich. Juyong showed how to navigate through collaboration networks on classical music CDs, and through judge biases in music competitions. By the way, Max dominated — as expected — the lighting talk session, showing some new products coming from his digital humanities landmark published last year in Science.  Tomomi Kito was also great: she borrowed the tools of economic complexity and shifted her focus from the macro analysis of countries to the micro analysis of networks of multinational corporations. A final mention goes to Roberta Sinatra. Her talk was about her struggle into making PhD committees recognize that what she is doing is actually physics. It resonates with my personal experience, trying to convince hiring committees that what I’m doing is actually computer science. Maybe we should all give up the struggle and just create a network science department.

And so we get to the last treat of the conference: the Erdos-Renyi prize, awarded to the most excellent network researcher under the age of 40. This year it went to Aaron Clauset, and this pleases me for several reasons. First, because Aaron is awesome, and he deserves it. Second, because he is the first computer scientist who is awarded the prize, and this just gives me hope that our work too is getting recognized by the network gurus. His talk was fantastic on two accounts.

aaron1

For starters, he presented his brand new Index of Complex Networks. The interface is pretty clunky, especially on my Ubuntu Firefox, but that does not hinder the usefulness of such an instrument. With his collaborators, Aaron collected the most important papers in the network literature, trying to find a link to a publicly available network. If they were successful, that link went in the index, along with some metadata about the network. This is going to be a prime resource for network scientists, both for starting new projects and for the sorely needed task of replicating previous results.

Replication is the core of the second reason I loved Aaron’s talk. Once he collected all these networks, for fun he took a jab at some of the dogmas of networks science. The main one everybody knows is: “Power-laws are everywhere”. You can see where this is going: the impertinent Colorado University boy showed that yes, power-laws are very common… among the 5-10% of networks in which it is possible to find them. Not so much “everywhere” any more, huh? This was especially irreverent given that not so long before Stefan Thurner gave a very nice plenary talk featuring a carousel of power laws. I’m not picking sides on the debate — I feel hardly qualified in doing so. I just think that questioning dearly held results is always a good thing, to avoid fooling ourselves into believing we’ve reached an objective truth.

netsci3

Among the non-scientific merits of the conference, I talked with Vinko Zlatic about the Croatian government on the brink of collapse, spread the search for a new network scientist by the Center for International Development, and discovered that Korean pizzas are topped with almonds (you didn’t really think I was going to let slip that pizza reference at the beginning of the post, did you?). And now I made myself sad: I wish there was another NetSci right away, to shove my brain down into another blender of awesomeness.  Oh well, there are going to be plenty of occasions to do so. See you maybe in Dubrovnik, Tel-Aviv or Indianapolis?

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20 May 2016 ~ 0 Comments

Program of Netonets 2016 is Out!

As announced in the previous post, the symposium on networks of networks is happening in less than two weeks: May 31st @ 9AM, room Dongkang C of the K-Hotel Seoul, South Korea. Przemek Kazienko, Gregorio D’Agostino and I have a fantastic program and set of speakers to keep you entertained on multilayer, interdependent and multislice networks. Take a look for yourself!

Session I

9:00 – 9:15: Room set up
9:15 – 9:30: Welcome from the organizers
9:30 – 10:15: Invited I: Yong-Yeol Ahn: Dynamics of social network of belief networks
10:15 – 11:00: Invited II: Luca Maria Aiello: The Nature of Social Links

11:00 – 11:30: Coffee Break

Session II

11:30 – 12:15: Invited III: Jianxi Gao: Networks of Networks: From Structure to Dynamics
12:15 – 13:00: Invited IV: Tomasz Kajdanowicz: Fusion methods for classification in multiplex networks

13:00 – 14:30: Lunch Break

Session III

14:30 – 15:15: Invited V: Michael Danziger: Beyond interdependent networks
15:15 – 15:35: Contributed I: Bruno Coutinho: Greedy Leaf Removal on Hypergraphs
15:35 – 15:55: Contributed II: Yong Zhuang: Complex Contagions in Clustered Random Multiplex Networks

15:55 – 16:30: Coffee Break

Session IV

16:30 – 17:15: Invited VI: Nitesh Chawla: From complex interactions to networks: the higher-order network representation

17:15 – 18:00: Round table – Open discussion
18:00 – 18:15: Organizers wrap up

Remember to register to the main NetSci conference if you want to attend.

Incidentally, the end of May is going to be a rather busy period for me. Besides co-organizing Netonets and speaking at the main Netsci conference, I’m going to present also at the Core50 conference in Louvain-la-Neuve, Belgium, on the role of social and mobility networks in shaping the economic growth of a country. Thanks to Jean-Charles Delvenne for inviting me!

I hope to see many of you there!

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17 March 2016 ~ 0 Comments

Networks of Networks @ NetSci 2016

EDIT: Deadlines & speakers updated. Submission deadline is on April 27th, notification on April 29th.

 

Dear readers of this blog — yes, both of you –: it’s that time of the year again. As tradition dictates, I’m organizing the Networks of Networks symposium, satellite event of the NetSci conference.

Networks of networks are structures in which the nodes may be connected through different relations. They can represent multifaceted social interaction, critical infrastructure and complex relational data structures. In the symposium, we are looking for a diversity of research contributions revolving around networks of networks of any kind: in social media, in infrastructure, in culture. The call for contributed talks is OPEN, and you can submit your abstract here: https://easychair.org/conferences/?conf=non2016

The deadline for submissions is April 15th, 2016 April 27th, 2016, just a month from now. We will notify acceptance by April 22nd, 2016 April 29th, 2016.

Here’s my handy guide to few of the many reasons to come:

  • Networks of networks are awesome, a hot topic in network science and a lot of super smart people work on them. You wouldn’t pass the opportunity to mingle with them, would you?
  • We have a lineup of outstanding confirmed keynotes this year — truth to be told, we have that every year:
  • This year NetSci will take place at the K-Hotel, Seoul, Korea (South, whew…). You really should not miss this occasion to visit such fascinating place.

The Networks of Networks symposium will be held on May 31st, 2016. The full conference, including all satellites, runs from May 30th to June 3rd. You can find all relevant information for the conference in the official NetSci website. Our symposium has a website too: check it out. In it, you will find also the fundamental information about all the people organizing this event with me: without them none of this would be possible. Here they are:

And also a list of other people, helping with their ideas, time and enthusiasm:

  • Matteo Magnani
  • Ian Dobson
  • Luca Rossi
  • Leonardo Duenas-Osorio
  • Dino Pedreschi
  • Guido Caldarelli
  • Vito Latora

Hope to see many of you in Korea!

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18 November 2015 ~ 0 Comments

Evaluating Prosperity Beyond GDP

When reporting on economics, news outlets very often refer to what happens to the GDP. How is policy X going to affect our GDP? Is the national debt too high compared to GDP? How does my GDP compare to yours? The concept lurking behind those three letters is the Gross Domestic Product, the measure of the gross value added by all domestic producers in a country. In principle, the idea of using GDP to take the pulse of an economy isn’t bad: we count how much we can produce, and this is more or less how well we are doing. In practice, today I am jumping on the huge bandwagon of people who despise GDP for its meaningless, oversimplified and frankly suspicious nature. I will talk about a paper in which my co-authors and I propose to use a different measure to evaluate a country’s prosperity. The title is “Going Beyond GDP to Nowcast Well-Being Using Retail Market Data“, my co-authors are Riccardo Guidotti, Dino Pedreschi and Diego Pennacchioli, and the paper will be presented at the Winter edition of the Network Science Conference.

GDP is gross for several reasons. What Simon Kuznets said resonates strongly with me, as already in the 30s he was talking like a complexity scientist:

The valuable capacity of the human mind to simplify a complex situation in a compact characterization becomes dangerous when not controlled in terms of definitely stated criteria. With quantitative measurements especially, the definiteness of the result suggests, often misleadingly, a precision and simplicity in the outlines of the object measured. Measurements of national income are subject to this type of illusion and resulting abuse, especially since they deal with matters that are the center of conflict of opposing social groups where the effectiveness of an argument is often contingent upon oversimplification.

cdp1

In short, GDP is an oversimplification, and as such it cannot capture something as complex as an economy, or the multifaceted needs of a society. In our paper, we focus on some of its specific aspects. Income inequality skews the richness distribution, so that GDP doesn’t describe how the majority of the population is doing. But more importantly, it is not possible to quantify well-being just with the number of dollars in someone’s pocket: she might have dreams, aspirations and sophisticated needs that bear little to no correlation with the status of her wallet. And even if GDP was a good measure, it’s very hard to calculate: it takes months to estimate it reliably. Nowcasting it would be great.

And so we tried to hack our way out of GDP. The measure we decided to use is the one of customer sophistication, that I presented several times in the past. In practice, the measure is a summary of the connectivity of a node in a bipartite network*. The bipartite network connects customers to the products they buy. The more variegated the set of products a customer buys, the more complex she is. Our idea was to create an aggregated version at the network level, and to see if this version was telling us something insightful. We could make a direct correlation with the national GDP of Italy, because the data we used to calculate it comes from around a half million customers from several Italian regions, which are representative of the country as a whole.

gdp2

The argument we made goes as follows. GDP stinks, but it is not 100% bad, otherwise nobody would use it. Our sophistication is better, because it is connected to the average degree with which a person can satisfy her needs**. Income inequality does not affect it either, at least not in trivial ways as it does it with GDP. Therefore, if sophistication correlates with GDP it is a good measure of well-being: it captures part of GDP and adds something to it. Finally, if the correlation happens with some anticipated temporal shift it is even better, because GDP pundits can just use it as instantaneous nowcasting of GDP.

We were pleased when our expectations met reality. We tested several versions of the measure at several temporal shifts — both anticipating and following the GDP estimate released by the Italian National Statistic Institute (ISTAT). When we applied the statistical correction to control for the multiple hypothesis testing, the only surviving significant and robust estimate was our customer sophistication measure calculated with a temporal shift of -2, i.e. two quarters before the corresponding GDP estimate was released. Before popping our champagne bottles, let me write an open letter to the elephant in the room.

gdp3

As you see from the above chart, there are some wild seasonal fluctuations. This is rather obvious, but controlling for them is not easy. There is a standard approach — the X-13-Arima method — which is more complicated than simply averaging out the fluctuations. It takes into account a parameter tuning procedure including information we simply do not have for our measure, besides requiring observation windows longer than what we have (2007-2014). It is well possible that our result could disappear. It is also possible that the way we calculated our sophistication index makes no sense economically: I am not an economist and I do not pretend for a moment that I can tell them how to do their job.

What we humbly report is a blip on the radar. It is that kind of thing that makes you think “Uh, that’s interesting, I wonder what it means”. I would like someone with a more solid skill set in economics to take a look at this sophistication measure and to do a proper stress-test with it. I’m completely fine with her coming back to tell me I’m a moron. But that’s the risk of doing research and to try out new things. I just think that it would be a waste not to give this promising insight a chance to shine.


* Even if hereafter I talk only about the final measure, it is important to remark that it is by no means a complete substitute of the analysis of the bipartite network. Meaning that I’m not simply advocating to substitute a number (GDP) for another (sophistication), rather to replace GDP with a fully-blown network analysis.

** Note that this is a revealed measure of sophistication as inferred by the products actually bought and postulating that each product satisfies one or a part of a “need”. If you feel that the quality of your life depends on you being able to bathe in the milk of a virgin unicorn, the measure will not take into account the misery of this tacit disappointment. Such are the perils of data mining.

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