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Text Algorithms in Economics

Author

Listed:
  • Elliott Ash

    (Center for Law and Economics, ETH Zurich, Zurich, Switzerland)

  • Stephen Hansen

    (Department of Economics, University College London, London, United Kingdom)

Abstract

This article provides an overview of the methods used for algorithmic text analysis in economics, with a focus on three key contributions. First, we introduce methods for representing documents as high-dimensional count vectors over vocabulary terms, for representing words as vectors, and for representing word sequences as embedding vectors. Second, we define four core empirical tasks that encompass most text-as-data research in economics and enumerate the various approaches that have been taken so far to accomplish these tasks. Finally, we flag limitations in the current literature, with a focus on the challenge of validating algorithmic output.

Suggested Citation

  • Elliott Ash & Stephen Hansen, 2023. "Text Algorithms in Economics," Annual Review of Economics, Annual Reviews, vol. 15(1), pages 659-688, September.
    • Handle: RePEc:anr:reveco:v:15:y:2023:p:659-688
    DOI: 10.1146/annurev-economics-082222-074352
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    Cited by:

    1. Pablo Ottonello & Wenting Song & Sebastian Sotelo, 2024. "An Anatomy of Firms’ Political Speech," NBER Working Papers 32923, National Bureau of Economic Research, Inc.
    2. Vito Cormun & Kim Ristolainen, 2024. "Exchange Rate Narratives," Discussion Papers 167, Aboa Centre for Economics.
    3. Ilyana Kuziemko & Nicolas Longuet-Marx & Suresh Naidu, 2024. "“Compensate the Losers?†Economic Policy and Partisan Realignment in the US," Working Papers 321, Princeton University, Department of Economics, Center for Economic Policy Studies..
    4. Lorenz Gschwent & Bjorn Hammarfelt & Martin Karlsson & Mathias Kifmann, 2024. "The Rise of Health Economics: Transforming the Landscape of Economic Research," Papers 2410.06313, arXiv.org.

    More about this item

    Keywords

    text as data; topic models; word embeddings; large language models; transformer models;
    All these keywords.

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis

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