Funny concept to grasp, but the Dow Jones can be predicted 87.6% of the time based off the moods people twitter about. “Twitter Mood Predicts The Stock Market,” A blog on technologyreview.com, describes how about 10 million tweets can do this phenomenon. Researches have concluded that based on the calmness levels of people who twiter, the Dow Jones will have a direct correlation. Many other people may believe this is an ad hoc argument, but statistics back this up, mostly. Researchers are trying to find other variables to eliminate out of there current algorithm to try to find out why exactly this relationship happens.
This article may intrigue math majors, economists, and investors. The serious tone throughout the blog will help portray these statistics as a plausible way to estimate the growth of the economy. The reason I was interested in it was because it seemed to me like an abstract statement, and also that it is a balance between my classes of statistics and economics.
What is the most important thing you have learned? Why?
The most important thing I learned was that people’s moods are directly related to the economy. I would never have expected the mood calm to be the most corresponding, I probably would have guessed either happy or sad/depressed. Although it seems illogical, the economic text books do teach that people’s moods will effect our economy’s output.