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When I mention a lack of staff, it is not so much a lack of straight programmers, but people who know the programming technology, and people who also understand the subject matter well enough to not need a whole lot of guidance or extremely explicit specifications.

Stephen Eick: So with your data, what are the privacy issues? I have noticed the few times I go to the store that you now have store cards, and so the stores know everything I have bought; they know who I am; they know my historical buying pattern. I am sure they have squirreled all this data away in a database. I am expecting soon to show up at the store and be pitched with coupons as I walk in.

Schmitz: That has not happened to you yet: I am not being facetious; we do not currently run any programs like that, but there are programs of that nature.

Participant: I think since they know everything I have bought, they are going to start targeting me with coupons. I personally resist, because I refuse to have a card. But others use every little coupon they can get.

Schmitz: There are two privacy issues. The privacy issue with our store audit database involves a contract that we have with the grocery chains that we will not release data identified with specific individual stores. We will not release sales data. So when we put out reports and so forth, we have to make sure that we have aggregated to the extent that we do not identify individual stores and say how much of a product they have sold.

The second privacy issue concerns individuals. We do have a sample of 100,000 U.S. households that identified themselves, and from whom we have a longitudinal sample that goes back anywhere from 3 to 10 years. We release that data, but it is masked as to the individuals. We have demographics on the individuals, but we do not identify them.

Eick: The other aspect of privacy involves the security cameras—at some point they are going to start tracking where I go in the store and what I look at. Then when I buy it, they are going to know it was me. So they are going to know not only what I bought, but also what I thought about buying.

Schmitz: Security cameras are used not so much to track people through the stores as to indicate when people are unhappy or happy about things—at hotels and so forth. We are not doing any of that yet.

Lyle Ungar: Are all your computations done off-line, or do you do on-line calculations, and how complex are they? Do you do factor analysis? Do you run correlations with demographics?

Schmitz: We do factor analysis off-line in order to reduce the dimensionality—or principal components—rather than reduce the dimensionality on our demographic data. We do that off-line and keep just component weights. About the most complicated things we do on-line are some fairly simple regressions and correlations with a little bit but not a whole lot of attention to robustization.

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