Nowcasting With Google Trends in an Emerging Market

Yan Carrière-Swallow and Felipe Labbé ()

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: Most economic variables are released with a lag, making it difficult for policy-makers to make an accurate assessment of current conditions. This paper explores whether observing Internet browsing habits can inform practitioners about real-time aggregate consumer behavior in an emerging market. Using data on Google search queries, we introduce a simple index of interest in automobile purchases in Chile and test whether it improves the fit and efficiency of nowcasting models for automobile sales. We also examine to what extent our index helps us identify turning points in sales data. Despite relatively low rates of Internet usage among the population, we find that models incorporating our Google Trends Automotive Index outperform benchmark specifications in both in-sample and outof- sample nowcasts while providing substantial gains in information delivery times.

Date: 2010-07
New Economics Papers: this item is included in nep-for and nep-ict
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Journal Article: Nowcasting with Google Trends in an Emerging Market (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:588

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