Hong Kong Monthly Index

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We are pleased to host a new index of economic policy uncertainty for Hong Kong developed by Paul Luk, Michael Cheng, Philip Ng and Ken Wong.

These researchers compile the Economic Policy Uncertainty Index for Hong Kong following the methods in "Measuring Economic Policy Uncertainty" by Scott Baker, Nick Bloom and Steven J. Davis. Their index starts in April 1998 and runs through the present.

They construct their index using ten Hong Kong newspapers: Wen Wei Po, Sing Pao, Ming Pao, Oriental Daily, Hong Kong Economic Journal, Sing Tao Daily, Hong Kong Economic Times, Apple Daily, Hong Kong Commercial Daily, and Ta Kung Pao. The newspaper articles are available in the Wisers Information Portal from April 1998 onwards. For each newspaper and month, they count articles that contain the traditional Chinese language equivalent of one or more terms in each of the following term sets:

Since Hong Kong newspapers typically have extensive China and international news sections, criterion (1) serves to remove uncertainty not directly related to Hong Kong.

They scale the monthly count of articles that meet criteria (1)-(4) above by the count of articles in the same newspaper and month that meet criteria (1) and (2), yielding a monthly scaled EPU count for each newspaper. They then standardize each newspaper's scaled EPU count to unit standard deviation from April 1998 to December 2009. Using the standardized, scaled EPU frequency counts, they average across the ten papers by month to obtain their EPU index. In a final step, they multiplicatively rescale the index to a mean of 100 from April 1998 to December 2009.

The researchers thank Steve Davis for helpful comments on a preliminary version of their EPU index for Hong Kong. For additional discussion and an analysis that uses their Hong Kong EPU index, see "Economic Policy Uncertainty Spillovers in Small Open Economies: the Case of Hong Kong."