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Title:Forecasting private consumption: survey-based indicators vs. Google trends PDF Logo
Authors:Schmidt, Torsten
Vosen, Simeon
Issue Date:2009
Series/Report no.:Ruhr economic papers 155
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
Appears in Collections:Ruhr Economic Papers, RWI
Publikationen von Forscherinnen und Forschern des RWI

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