Forecasting private consumption: survey‐based indicators vs. Google trends

Simeon Vosen and Torsten Schmidt

Journal of Forecasting, 2011, vol. 30, issue 6, 565-578

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. Copyright (C) 2011 John Wiley & Sons, Ltd.

Keywords: Google Trends; private consumption; forecasting; consumer sentiment indicators (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (180)

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http://hdl.handle.net/10.1002/for.1213

Related works:
Working Paper: Forecasting Private Consumption: Survey-based Indicators vs. Google Trends (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:jof:jforec:v:30:y:2011:i:6:p:565-578

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