Quant Macro Investing

Risk Taking Disciplined

Facebook: United States Gross National Happiness

United States Gross National Happiness

http://apps.facebook.com/usa_gnh/

Every day, millions of people share how they feel with the people who matter the most in their lives through status updates on Facebook. These updates are tiny windows into how people are doing. They’re brief, to the point and descriptive of what’s going on this week, today or right now. Grouped together, these updates are indicative of how we are collectively feeling. Measuring how well-off, happy or satisfied with life the citizens of a nation are is part of the Gross National Happiness movement. When people in their status updates use more positive words–or fewer negative words–then that day as a whole is counted as happier than usual. (To protect your privacy, no one at Facebook actually reads the status updates in the process of doing this research; instead, our computers do the word counting after all personally identifiable information has been removed.)

The graph contains several metrics. The first, GNH represents our measure of Gross National Happiness. The other two, Positivity and Negativity, represent the two components of GNH: The extent to which words used on that day were positive and negative. Gross National Happiness is the difference between the positivity and negativity scores, though they are interesting to view on their own.

You may notice that Positivity and Negativity are going down over time–that’s because as Facebook grows, there is more variability in the Facebook demographic and how people use status updates (using more or less emotional words). That’s why the GNH metric looks at the difference rather than the raw scores.

October 13, 2009 - Posted by | Google / Internet, Indicator setup

6 Comments »

  1. The discussion of Gross National Happiness came to the spot light again earlier when French President Sarkozy suggested to make joy and wellbeing the key indicators of growth, rather than traditional yardsticks like a country’s gross domestic product (GDP).

    Actually the traditional GDP counts only Net Export, Government Spending, Investment and Private Consumption, ignoring the effect of happiness and the hidden costs imposed during production. In reality some economic activities can’t be totally counted by assigning the dollar signs for GDP calculations. Some cost are hidden or under-estimated. GNH will be a novel way to reflect these costs from an distinct view angle.

    If the China GDP also counts the effect of GNH, it will be probably lowered, for social and political reasons, such as an extreme disparity between the rich and the poor.

    On the methodology of GNH measurement, it is still focus of debate as there is a few good way to measure. However, it is still a good direction to refelct GNH as a component of ecomomic development.

    Comment by Angelo | October 14, 2009 | Reply

    • There are a lot of data in facebook and twitter. Would word counts be used as indicator for certain trading?

      How about combining data from MySpace, facebook and twitter?

      One problem is social networks are not that “finance”. http://www.Stocktwits.com may be the best.

      Or stock market related chat room/message board in China…

      Comment by vicktorquant | October 14, 2009 | Reply

  2. I think so. If we can feed in the data from facebook/Twitter/Myspace to excel, (in the similar manner as Bloomberg’s data can be fed to excel), we can dig the data by word counting.

    For example, to research the sentiment of user,
    wordcount the usage of the words “Yeah!”, “Congrats!” or “Oops!” , “Sorry…”

    This methodology can be further developed to trading. For example, if a quant hedge fund wants to know the investors’ sentiment, feed in the text of investors’ chat room or http://www.Stocktwits.com. Then wordcount the phrase ” sell stocks” or “Buy bonds” , vice versa. Then one may know the investor’s sentiment at that time.

    After that, with use of VBA in excel, construct the logics and loops. The trading decision can be derived upon we feed in the texts and run the VBA MACRO.

    Comment by Angelo | October 15, 2009 | Reply

    • Hi anyone familiar with blog operations over wordpress.com? We would like you guys’ comments be posted immediately (therefore no need for us to approve in order for your comment to be published). We don’t know how to set it up though.

      Comment by vicktorquant | October 15, 2009 | Reply

  3. Go to Settings->Discussion->Before a comment appears, uncheck-> An administrator must always approve the comment

    Comment by Gabriel | November 15, 2009 | Reply

    • Thanks Gabriel

      Comment by vicktorquant | November 16, 2009 | Reply


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: