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Eye in the sky: private satellites and government macro data

Author

Listed:
  • Abhiroop Mukherjee

    (Department of Finance, The Hong Kong University of Science and Technology.)

  • George Panayotov

    (Department of Finance, The Hong Kong University of Science and Technology.)

  • Janghoon Shon

    (Department of Finance, The Hong Kong University of Science and Technology.)

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.

Suggested Citation

  • Abhiroop Mukherjee & George Panayotov & Janghoon Shon, 2019. "Eye in the sky: private satellites and government macro data," HKUST IEMS Working Paper Series 2019-68, HKUST Institute for Emerging Market Studies, revised Oct 2019.
    • Handle: RePEc:hku:wpaper:201968
    as

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    File URL: https://iems.ust.hk/assets/publications/working-papers-2019/iemswp2019-68.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Alternative data; Satellite Imagery; Asset price impact; Macroeconomic Estimates;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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