Does Online Search Predict Sales? Evidence from Big Data for Car Markets in Germany and the UK

Georg von Graevenitz, Christian Helmers, Valentine Millot and Oliver Turnbull
Additional contact information
Christian Helmers: Santa Clara University
Valentine Millot: OECD
Oliver Turnbull: Bristol University

No 2016-07, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: We use online search data to predict car sales in the German and UK automobile industries. Search data subsume several distinct search motives, which are not separately observable. We develop a model linking search motives to observable search data and sales. The model shows that predictions of sales relying on observable search data as a proxy for pre-purchase search will be biased. We show how to remove the biases and estimate the effect of pre-purchase search on sales. To assist identification of this effect, we use the introduction of scrappage subsidies for cars in 2008/2009 as a quasi-natural experiment. We also show that online search data are (i) highly persistent over time, (ii) potentially subject to permanent shocks, and (iii) correlated across products, but to different extent. We address these challenges to estimation and inference by using recent econometric methods for large N, large T panels.

Keywords: Online search; Google Trends; Serial correlation; Non-stationarity; Common Correlated Effects; Large Panels (search for similar items in EconPapers)
Date: 2016-08-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://ueaeco.github.io/working-papers/papers/ccp/CCP-16-07.pdf main text (application/pdf)

Related works:
Working Paper: Does Online Search Predict Sales? Evidence from Big Data for Car Markets in Germany and the UK (2016)
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:uea:ueaccp:2016_07

Ordering information: This working paper can be ordered from
Juliette Hardman, Center for Competition Policy, University of East Anglia, Norwich Research Park, Norwich, NR4 7TJ, UK

Access Statistics for this paper

More papers in Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Juliette Hardmad ().