The Measurement Revolution? Credible Measurement and Inference in the Age of AI

Artificial intelligence (AI) is transforming measurement in economics. AI models convert unstructured data, such as text and images, into structured variables at low cost, making previously prohibitive measurement feasible at scale. This shifts the bottleneck from finding any scalable measure of a phenomenon to choosing among many plausible ones, which may support different empirical conclusions. This review provides guidance for navigating that shift. We describe three stages at which AI enters the measurement pipeline---discovery, construct definition, and observation---and what each demands of researchers. We argue that credible inference with AI-generated variables requires appropriately designed validation: anchoring measurement to explicit criteria, rather than informal claims that a proxy is reasonable. We then examine how validation samples support valid inference even when AI predictions are arbitrarily biased, and what can be done when a random validation sample is unavailable.

LLM Consumer Behavior Theory: Foundations of a Novel Research Field

Large language models (LLMs) are increasingly deployed as autonomous agents that make consumption decisions on behalf of users. This shift raises fundamental questions for consumer theory, which has traditionally modeled humans as the primary decision-makers. In this paper, we introduce LLM Consumer Behavior Theory, a new field of study concerned with analyzing consumer behavior in agentic markets. Drawing on classical and behavioral economics alongside recent advances in Natural Language Processing, we formalize how human preferences are reflected and acted upon by LLM-based agents, and how agent-level decisions aggregate into market demand. We unify previously fragmented literature on LLM decision-making, human behavior simulation, and preference elicitation under a common economic lens, highlighting where assumptions, such as rationality and heterogeneity, may fail in agentic markets. Rather than providing empirical validation, this paper outlines the scope of LLM consumer behavior and identifies open research questions related to alignment, preference representation, and market dynamics.