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Dr. Robert Wuertz

May 17, 2018

New Wine in New Bottles? The Fermentation of Behavioral Economics in PFM

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Introduction

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What’s DRM?

What’s it got to do with wine?

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Overview

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Is use of behavioral economics new?

Is big data new?

Where big data breaks out

Predictions: where is this taking us?

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What can we expect from behavioral economics?

Is behavioral economics new?

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Guatemala study

Evidence from El Salvador

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• Historical example of big data • Computer Assisted Mass Appraisal

• Exploratory data analysis

Is big data new?

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How big data can strengthen behavioral economics?

Predictive data mining

Could it help in Guatemala?

And from there?

The IRS foreshadows the future

Where big data breaks out: traditional

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IRS • Internal data bases, • Commercial sources

(Facebook, MySpace, YouTube)

Sources of data

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Jamaica • Internal data bases • Telecommunications

data

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Sources of data

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IRS uses big data for: • Charting and analyzing social media

• Targeting audits by matching tax filings to social media or electronic

payments

• Tracking individual Internet addresses and emailing patterns

• Sorting data in 32,000 categories of metadata and 1 million unique “attributes”

• Machine learning across “neural” networks

• Statistical and agent-based modeling

• Relationship analysis based on Social Security numbers

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Other sources of data: Mobile devices

Software logs

Radio-frequency identification readers, and

Wireless sensor networks

Where big data breaks out: fiscal space

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Indonesia

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• How the financial industry uses big data

The private sector foreshadows the future

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• Privacy • Ethical issues

The downside of big data

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Is behavioral economics new wine? What’s the vote?

Big data can inform behavioral economics

And the future is…

Conclusions

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Questions?

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