The Book of Alternative Data

CHAPTER 18Government, Industrial, and Corporate Data

18.1. INTRODUCTION

Governments and corporations publish a large amount of data on a regular basis. It is, in effect, exhaust data that is derived from the everyday activity of corporations, individuals, and governments. Some of this would not be regarded as alternative data. For example, headline data on the labor market, growth, and inflation has been used heavily by market participants. Corporations that are publicly trading have to report their earnings every quarter and various other statistics pertaining to their business.

In practice, many of these “common” datasets from governments and corporates are released at a very low frequency. One example is GDP data, which is typically released on a quarterly basis in most countries, albeit in the form of various estimates. Most economic datasets are released on a monthly basis, and only very occasionally on a weekly basis (such as US jobless claims data).

Such a large volume of this data is released that, in practice, most of it is rarely examined in all its entirety by many market participants. We can think of the US labor report, as an example. While market participants will tend to flag the headline figures, most of the underlying data in the report is ignored by the markets. We might consider some of these less commonly used data statistics as alternative data. Indices that aggregate some of these datasets in novel ways can also sometimes be considered as forms of alternative ...