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In an increasingly data-rich world, econometrics expert Dr Peng, and his colleagues, are helping develop new methods that will simplify complex analysis.
The Monash Business School Econometrics and Business Statistics Department senior lecturer says the ‘big data revolution’ of recent years has seen the rapid emergence of huge volumes of information that are too difficult to process using traditional methods.
“Traditional panel data sets are by nature two-dimensional,” Dr Peng says.
“But as large numbers of data sets have been compiled and made public, the economic and econometric model formulations have become more and more complex.”
To solve the problem, he and co-authors Prof Guohua Feng from the University of North Texas and Monash University Prof Jiti Gao, have created flexible statistical calculation models based on iterated principal component analysis.
This new method finds the best solution using an easy procedure that requires limited mathematical and coding skills.
“By contrast, the traditional methods always require different types of computationally heavy algorithms to look for the solution,” he says.
“In other words, our method simplifies one type of complex minimisation problem so that it is applicable to a much wider range of audiences.”
Dr Peng says his work has the potential to help resolve important empirical problems such as international trade flows and migration flows.
“These are extremely important to Australia because it is a country that relies heavily on both the immigration and exporting businesses,” Dr Peng says.
The team, together with Prof Russell Smyth (Deputy Dean Research, Monash Business School), has also been studying country-level energy datasets, with promising results.
“From a policy perspective, our findings bode well for climate change mitigation because it suggests energy intensity will fall with economic growth,” he says.
Dr Peng’s research has been cited extensively in leading international journals such as the Journal of Econometrics and the Journal of Business and Statistics.
It has also earned him a 2021 Dean's Award for Excellence in Research by an Early Career Researcher.
Dr Peng says - much like his new calculation methods - the secret to his research success is simple.
“Hard work and patience,” he says.