Economic Impact Prediction Using Transaction Data Models

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Solution Overview

Problem

Conventional economic impact studies are prone to errors due to subjective assumptions and insufficiently precise macroeconomic data, making it challenging to accurately determine the economic impact of events on geographic areas.

Innovation Solution

A computer-implemented method using historical transaction data to build a reference model that predicts the number of active accounts and merchants, and consumer spend in a target geographic area, based on similar events in comparable areas, generating a more precise economic impact report.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Measurement precision

If conventional economic impact analysis uses macroeconomic data and subjective assumptions, then the analysis can be conducted with available data, but the precision and reliability of the economic impact determination deteriorates

Engineering Contradiction:

Improveprecision of economic impact determinationVSAvoidcomplexity of data collection and modeling system

Core Design Contradiction:

Measurement precisionVSDevice complexity

Solution Approach 1:

The patent introduces payment transaction data as an intermediary medium between macroeconomic data and economic impact determination. This transaction data serves as a bridge that translates coarse macroeconomic indicators into granular, location-specific economic measurements, enabling precise impact analysis without requiring direct collection of complex economic models

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The patent replaces the traditional mechanical/economic modeling system (which relies on economists formulating assumptions and building complex economic models) with a data-driven system that uses historical payment transaction records. This substitution eliminates subjective human judgment from the modeling process while maintaining system complexity through automated data processing

Inventive Principle:

Principle #28Mechanics substitution (Replace mechanical system)

2Reliability

If conventional economic impact analysis relies on economist expertise and assumptions, then the analysis can be performed with existing macroeconomic data, but the reliability of the results deteriorates due to subjectivity

Engineering Contradiction:

Improvereliability of economic impact analysisVSAvoidloss of granular economic detail

Core Design Contradiction:

ReliabilityVSLoss of information

Solution Approach 1:

The patent segments macroeconomic data into granular payment transaction records that are specific to locations, time periods, and economic activities. By breaking down aggregate economic data into individual transaction components, the system preserves detailed economic information while enabling reliable, objective analysis through automated processing of segmented data points

Inventive Principle:

Principle #1Segmentation

3Measurement precision

If macroeconomic data is used for economic impact studies, then the data is readily available from public sources, but the precision of identifying positive and negative economic impacts deteriorates

Engineering Contradiction:

Improveprecision of economic impact measurementVSAvoidease of data acquisition

Core Design Contradiction:

Measurement precisionVSEase of manufacture

Solution Approach 1:

The patent changes the parameter of data granularity by transforming coarse macroeconomic parameters into fine-grained payment transaction parameters. This parameter change enables precise measurement of economic impacts at specific locations and time periods while maintaining ease of data acquisition through partnerships with payment processors who already collect this data for other purposes

Inventive Principle:

Principle #35Parameter changes

Data Source

PatentUS10929859B2Systems and methods for determining economic impact of an event within a geographic area

Publication Date: 2021.02.23 MASTERCARD INT INC

AI summary

A method for determining an economic impact of a candidate event includes receiving an event type identifier representing an event type of a candidate event to occur, and building a reference data store including historical transaction data records of payment transactions occurring in reference geographic areas associated with a reference event having the event type identifier. The method also includes generating a reference model from the historical transaction data records the models a reference number of active accounts and active merchants within a reference geographic area during a period of time associated with the reference event occurring in the geographic area. The method further includes determining a predicted number of active accounts and active merchants within the target geographic area using the reference model, and determining a predicted consumer spend using a predicted spend model. The method also includes generating an economic impact report including the consumer spend.