Eye in the Sky: Private Satellites and Government Macro Data

50 Pages Posted: 12 Sep 2019 Last revised: 17 Oct 2019

See all articles by Abhiroop Mukherjee

Abhiroop Mukherjee

Hong Kong University of Science & Technology (HKUST) - Department of Finance

George Panayotov

Hong Kong University of Science & Technology (HKUST)

Janghoon Shon

Hong Kong University of Science & Technology (HKUST) - Department of Finance

Date Written: October 16, 2019

Abstract

We develop an approach to identify whether recent technological advancements -- such as the rise of commercial satellite-based macroeconomic estimates -- can provide an effective alternative to government data. We measure the extent to which satellite estimates are affecting the value of government macro news using the asset price impact of scheduled announcements. Our identification relies on cloud cover, which prevents satellites from observing economic activity at a few key hubs. Applying our approach, we find that some satellite estimates are now so effective that markets are no longer surprised by government announcements. Our results point to a future in which the resolution of macro uncertainty is smoother, and governments have less control over macro information.

Keywords: Alternative data, Asset price impact, Satellite imagery, Macroeconomic eEstimates

JEL Classification: G14, E44

Suggested Citation

Mukherjee, Abhiroop and Panayotov, George and Shon, Janghoon, Eye in the Sky: Private Satellites and Government Macro Data (October 16, 2019). Available at SSRN: https://ssrn.com/abstract=3446701 or http://dx.doi.org/10.2139/ssrn.3446701

Abhiroop Mukherjee

Hong Kong University of Science & Technology (HKUST) - Department of Finance ( email )

Clear Water Bay, Kowloon
Hong Kong

George Panayotov (Contact Author)

Hong Kong University of Science & Technology (HKUST) ( email )

Clearwater Bay
Kowloon, 999999
Hong Kong
852-2358-5049 (Phone)
852-2358-1749 (Fax)

Janghoon Shon

Hong Kong University of Science & Technology (HKUST) - Department of Finance ( email )

Clear Water Bay, Kowloon
Hong Kong
852-67567630 (Phone)

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