”Writers who argue that data collection and analytics...

"Writers who argue that data collection and analytics favor the rich over the poor rely on hypothetical rather than actual examples,” said Technology Policy Institute President Thomas Lenard in comments filed Monday to the FTC ahead of its September workshop on big data (http://bit.ly/UxMqW2). No current evidence indicates that predictive analytics tools cause discrimination, he said. But the recent White House report on the subject (CD May 2 p3), and the FTC’s workshop lineup (http://1.usa.gov/1hFee3o) indicate otherwise, Lenard said. “Much of the concern seems to be that the predictive models may not be totally accurate,” he said. “Big data, however, can be expected to improve accuracy. The use of more data points makes it less likely that any single data point will be determinative, and more likely that a correct decision will be reached.” Additionally, big data is being used to develop products to benefit low-income individuals, Lenard said. He cited three companies -- Better Finance Inc., LendUp and ZestFinance -- that use additional data points to find people for “small, short-term” loans. These individuals might not have been able to get any loan previously, Lenard said. “It is more likely that price discrimination will favor lower-income individuals,” he said. “Since price discrimination involves charging different prices to different consumers for the same product based on their willingness to pay, and since willingness to pay is generally positively related to ability to pay, price discrimination will, other things equal, result in lower prices to lower-income consumers."