Running a mood analysis on tweets proved 90% accurate in predicting the stock market in an experiment by Professor Johan Bollen. By scanning 9.8 million public tweets in the US for emotional words like “friendly”, “happy” or “panicky”, they were able to gauge the mood of the American public – and they discovered there was a striking correlation between the mood on Twitter and the rise and fall of the Dow Jones.
Prof Bollen explained that Twitter acts as a barometer of public mood and confidence which in turn affects society and thus the economy.
“There are so many people using these online social networks now that we think they have become a major factor in shaping public sentiment, and as a result in shaping our society and our economy.”
Checking Twitter is certainly easier than understanding economic models, so Osborne might want to check this theory out…[via Metro]