Forecasting private consumption: survey-based indicators vs. Google trends
✍ Scribed by Simeon Vosen; Torsten Schmidt
- Publisher
- John Wiley and Sons
- Year
- 2011
- Tongue
- English
- Weight
- 383 KB
- Volume
- 30
- Category
- Article
- ISSN
- 0277-6693
- DOI
- 10.1002/for.1213
No coin nor oath required. For personal study only.
✦ Synopsis
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 Confi dence 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 signifi cant benefi ts to forecasters of private consumption.