Sources: BBC, Reuters, Spotify
Often in economics courses, we get told that the mood of consumers influences the business cycle along with performance of money market instruments. In most cases, people have failed to find parameters to ideally predict the state of the economy from a behavioral perspective as
surveys can tend to be biased and misinformed. However, a unique measurement showed that being able to gauge the consumer’s mood is easier than you think.
In April, Andy Haldane, the Chief Economist of the Bank of England, recommended that we look at the trends on music apps such as Spotify and Apple Music to gather a good sense on what is
going on in the economy. He feels that with the rise in digital use by consumers, that we have access to a valuable set of data that can influence analysis as he said in his own words: “Intriguingly, the resulting index of sentiment does at least as well in tracking consumer spending as the Michigan survey of consumer confidence,” he said, referring to a closely watched monthly survey in the United States of trends. “And why stop at music? People’s tastes in books, TV and radio may also offer a window on their soul. So too might their taste in games,” Haldane also says as he implies that a positive mood in the economy will correspond to positive vibes in the music that we listen to.
Researchers at Claremont Graduate University have since done some research on this belief using the 2008 financial crisis. In looking at the songs most popular during the difficult global financial crisis of 2008, they found that songs with lyrics associated with anticipation, disgust,
sadness, fear and anger peaked in popularity from 2008 to 2009 and then began to fall after that date. According to the research, “these plots indicate that individuals are projecting their
current states of mind into the music they choose to listen to.” Personally as a student, I could say that the music I listen to is more dependent on the academic environment than the economic but if there are measures to filter the audiences in
analyzing this to grasp the mood of regular income earners, then we might have the ideal solution to gauging the economy’s mood.