Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/29900 
Year of Publication: 
2009
Series/Report no.: 
Ruhr Economic Papers No. 155
Publisher: 
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI), Essen
Abstract: 
In this study we introduce a new indicator for private consumption based on search query time series provided by Google Trends. The indicator is based on factors extracted from consumption-related search categories of the Google Trends application Insights for Search. The forecasting performance of the new indicator is assessed relative to the two most common survey-based indicators - the University of Michigan Consumer Sentiment Index and the Conference Board Consumer Confidence Index. The results show that in almost all conducted in-sample and out-of-sample forecasting experiments the Google indicator outperforms the survey-based indicators. This suggests that incorporating information from Google Trends may offer significant benefits to forecasters of private consumption.
Subjects: 
Google Trends
private consumption
forecasting
Consumer Sentiment Indicator
JEL: 
C53
E21
E27
ISBN: 
978-3-86788-175-3
Document Type: 
Working Paper

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