Abstract
Diversity has tremendous value in modern society. Economic theories suggest that cultural and ethnic diversity may contribute to economic development and prosperity. To date, however, the correspondence between diversity measures and the economic indicators, such as the Consumer Price Index, has not been quantified. This is primarily due to the difficulty in obtaining data on the micro behaviors and macroeconomic indicators. In this paper, we explore the relationship between diversity measures extracted from large-scale and high-resolution mobile phone data, and the CPIs in different sectors in a tourism country. Interestingly, we show that diversity measures associate strongly with the general and sectoral CPIs, using phone records in Andorra. Based on these strong predictive relationships, we construct daily, and spatial maps to monitor CPI measures at a high resolution to complement existing CPI measures from the statistical office. The case study on Andorra used in this study contributes to two growing literature: linking diversity with economic outcomes, and macro-economic monitoring with large-scale data. Future study is required to examine the relationship between the two measures in other countries.
Highlights
Diversity is exceedingly valuable in modern society (Puritty et al, 2017)
There exist different opinions in economics; some claim that diversity measures predict economic growth (Montalvo and ReynalQuerol, 2005); some argue for a negative impact due to resource allocation between groups (Alesina and Ferrara, 2005); some argue that ethnic diversity deflates price bubbles (Levine et al, 2014); some argue that a diverse work force is generally beneficial to corporate profits and earnings (Wright et al, 1995; Herring, 2009)
We present a case study to explore the relationship between the travel demand based diversity measures extracted from mobile phone data and one of the most important macroeconomic indicators in this tourism country, namely the Consumer Price Index
Summary
Diversity is exceedingly valuable in modern society (Puritty et al, 2017). A commonly accepted view in cognitive science is that cognitive diversity enables the exchange of valuable information, thereby increasing creativity. Neighborhood ethnicity diversity has been shown to have different effects on housing price (Macpherson and Sirmans, 2001). The correspondence between micro-level diversity and macro-level economic indicators (e.g., Consumer Price Index, measuring changes in the cost of purchasing a fixed basket of goods (Stigler, 1961)) has not been quantified. This gap is primarily due to the lack of data on both micro-behavior and economic indicators
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