Adam Smith, sentiment and business analytics

In thinking about the upcoming inaugural Sentiment Analysis Symposium, I did a bit of exploring. Some of the early notions of sentiment can be attributed to Scottish born Adam Smith (1723-1790), who is often referred to as the first modern economist. One item from his 1759, “Theory of Moral Sentiment” stood out to me (an excerpt from Section 1.1.24):

"The sentiment or affection of the heart from which any action proceeds, and upon which its whole virtue or vice must ultimately depend, may be considered under two different aspects, or in two different relations; first, in relation to the cause which excites it, or the motive which gives occasion to it; and secondly, in relation to the end which it proposes, or the effect which it tends to produce.”

Perhaps not surprisingly then, both behavioural psychologists and stock market economists have examined the notion of sentiment for some time – both its cause and effect – with Dow, of the modern day (Dow Jones) Index, being one of them.

Being pragmatic – and translating this to how (and when) organizations successfully analyze sentiment – I am heartened to see that this is consistent with how we examine this today.

Understanding the relationship giving rise to emotional expressions in our current, connected world – sentiment analysis is part of a business analytics process. The evaluation of existing knowledge (observation and measurement of the motive) with the assessment of accurately measured sentiment expression (analysis of the effect) – from whatever communication vehicle the text data is collected. As with all analytics, models are tested, validated, and then deployed. Once deployed into business operations, sentiment is evaluated in real-time – sending triggers and updates to parts of the business that need to be informed and act upon the results. This analytic cycle is expressed further in an Interactive Tour and cited recently in Text Analytics – Two Worlds Collide.

Over 250 years later – with all that has changed since – the theory, at least this context, still makes sense in practice. So whether you are attending SAS Global Forum or the Sentiment Symposium we look forward to hearing about what you are doing in the Text Frontier. See you at the conference.

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