Retail giant Amazon employs more than 150 PhD economists to analyze transactions on its platform and measure inflation, CNN reports.
The role of Amazon's economists is not completely clear as the company requires staff to sign non-disclosure agreements. Now, with an estimated 1,000 PhD economists joining the U.S. workforce each year, Amazon has become one of the largest employers of economists behind organizations such as the Federal Reserve.
Amazon's economists use machine-learning algorithms to play out the possibilities of real-estate decisions, determine what advertisements attract customers and to designate the lowest prices to turn profit, according to the report. The economists do this by coupling their knowledge with software engineers to best analyze data and ask questions regarding commerce cause and effect.
"Imagine if you're a very large retailer that has a large number of locations," IBM Chief Economist Martin Fleming told CNN. "We could typically predict with about 30 percent to 40 percent accuracy what the likely performance is of that retail location. With the current capabilities with machine learning and artificial intelligence, we can get close to 90 percent accuracy in forecasting business at a particular location."
Amazon declined to allow any of its economists to answer any questions about their work to CNN. Daryl Fairweather, PhD, a former economist at Amazon and current chief economist at Redfin, a real estate website, told the network she was initially drawn to work at Amazon for the abundant research opportunities and ability to make an impact on the company's decision-making process.
"That was personally really exciting. The work that I do has clear value that you can see right away—it's not just hypothetical," Dr. Fairweather told CNN. "When you publish in an academic journal, it's hard to know that lawmakers are making different choices based on what your results are. When you're in the company, it's very clear that you're changing peoples' minds."
To view the full report, click here.