Capitalizing Data: A Case Study of Individual Credit Files


Capitalizing Data: A Case Study of Individual Credit Files


Thursday 15 December 2022, 12:30 — 13:30



Presented by Rachel Soloveichik (U.S. Bureau of Economic Analysis (BEA))

Individual credit files are very different from the complex digital data that has been studied by previous national accounting papers (Statistics Canada 2019) (Coyle 2022) (Calderon and Rassier 2022). Individual credit files are a simple record of loans and payments that can be stored on paper (Brenton 1964) and managed by customer service workers with only a high school degree (Bureau of Labor Statistics 2022a). Despite their simplicity, individual credit files are extremely valuable data. This paper uses recent research (Herkenhoff et al. 2021) (Dobbie et al. 2020) (Jansen et al. 2022) (Friedberg et al. 2021) to calculate that individual credit files yielded more than $1.1 trillion of services in 2017.

Capitalizing individual credit files changes measured growth in the 1970s noticeably, but has little impact on measured growth in other decades. This difference is due to the Fair Credit Reporting Act of 1970, which reduced the lifespan of credit file data from decades to only seven years. This paper treats the shorter lifespan as a doubling of quality-adjusted data prices and calculates that the sudden doubling in data prices reduced real GDP growth in 1971 by 2.7 percentage point. This decline in real output growth is more than matched by a decline in the real input growth due to the sudden disappearance of all credit file data older than seven years. So, capitalizing individual credit files raises productivity growth in the 1970’s by 0.2 percentage point per year.

Rachel Soloveichik is an economist at the Bureau of Economic Analysis (BEA).  Her current work focuses on natural resource exploration and the regional impact of product unavailability during coronavirus.  She is also studying the potential GDP and productivity impact of tracking capitalized advertising, “free” digital content, illegal activity, cultivated assets, valuables, and other items.  In the past, her groundbreaking work on entertainment originals paved the way for BEA to track entertainment originals as capital assets in the nation accounts starting in 2013.  Rachel Soloveichik graduated from the University of Chicago and joined BEA in 2007.  She is now living in Richmond, Virginia with her husband and ten children.