  Recent work has shown that the local non-Gaussianity parameter f_NL induces a
scale-dependent bias, whose amplitude is growing with scale. Here we first
rederive this result within the context of peak-background split formalism and
show that it only depends on the assumption of universality of mass function,
assuming halo bias only depends on mass. We then use extended Press-Schechter
formalism to argue that this assumption may be violated and the scale dependent
bias will depend on other properties, such as merging history of halos. In
particular, in the limit of recent mergers we find the effect is suppressed.
Next we use these predictions in conjunction with a compendium of large scale
data to put a limit on the value of f_NL. When combining all data assuming that
halo occupation depends only on halo mass, we get a limit of -29 ~ (-65)< f_NL
< +70 ~(+93) at 95% (99.7%) confidence. While we use a wide range of datasets,
our combined result is dominated by the signal from the SDSS photometric quasar
sample. If the latter are modeled as recent mergers then the limits weaken to
-31 ~(-96) < f_NL < +70 ~ (+96) . These limits are comparable to the strongest
current limits from the WMAP 5 year analysis, with no evidence of a positive
signal in f_NL. While the method needs to be thoroughly tested against large
scale structure simulations with realistic quasar and galaxy formation models,
our results indicate that this is a competitive method relative to CMB and
should be further pursued both observationally and theoretically.
