A monthly consumption indicator for Germany based on internet search query data

Torsten Schmidt and Simeon Vosen

No 208, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: In this study we introduce a new monthly indicator for private consumption in Germany based on search query time series provided by Google Trends. The indicator is based on unobserved factors extracted from a set of consumption-related search categories of the Google Trends application Insights for Search. The predictive performance of the indicator is assessed in real time relative to the European Commission's consumer confidence indicator and the European Commission's retail trade confidence indicator. In out-of-sample nowcasting experiments the Google indicator outperformed the surveybased indicators. In comparison to the other indicators, the new indicator also provided substantial predictive information on consumption beyond that already captured in other macroeconomic variables.

Keywords: Google Trends; Private Consumption; Forecasting; Consumer Sentiment Indicator (search for similar items in EconPapers)
JEL-codes: C53 E21 E27 (search for similar items in EconPapers)
Date: 2010
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Journal Article: A monthly consumption indicator for Germany based on Internet search query data (2012)
Journal Article: A monthly consumption indicator for Germany based on Internet search query data (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:208

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