Google Trends and reality: Do the proportions match?

Boriss Siliverstovs and Daniel S. Wochner

Journal of Economic Behavior & Organization, 2018, vol. 145, issue C, 1-23

Abstract: This study examines the extent to which real-world economic activity is reflected in aggregate online search behavior on Google Search. As opposed to previous studies, being subject to potential mismeasurement problems when examining search queries along their longitudinal dimension, we apply an alternative investigative approach that exploits the cross-sectional instead of the longitudinal informational content embodied in Googles data. Moreover, while previous studies most often examine a single Google Trends series, our analyses are based on over 60 distinct series, which allow us to assess how informative the data are, not only within each series, but also between series. Finally, our Google Trends indices are based on the recently launched Google Knowledge Graph technology, allowing for a remarkably accurate measurement of relevant search query volumes. We assess the informational value of the data as strong, semi-strong, or weak based on unbiasedness and efficiency considerations in a Mincer–Zarnowitz-type regression model. Here, the context of (Swiss) tourism demand proves particularly useful, and we find that search-based tourism demand predictions are, on average, highly accurate approximations of reality. This indicates that search-based indicators may serve as valuable real-time complements for the guidance of economic policy.

Keywords: Online search data; Google Trends; Predictive accuracy; Nowcasting; Tourism demand; Switzerland (search for similar items in EconPapers)
JEL-codes: C80 E29 Z30 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268117302937
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:145:y:2018:i:c:p:1-23

DOI: 10.1016/j.jebo.2017.10.011

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().