Here’s a unexpected new use for Google.
I’ve been reading over an economic white paper from Ruhr University’s department of economics which concludes that Google is a better forecaster of consumer confidence than traditional measures. Since private consumption/spending represents a significant portion of the gross domestic product in many countries, it is one of the things used to predict overall economic activity.
The authors of the white paper compared normal survey results to a study of consumption related search categories in Google Trends. Their conclusion?
“ The results show that in almost all 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.”
Apparently the Google indicators outperformed the US Conference Board Consumer Confidence Index. I wonder what other uses for Google data will emerge in the future.
Here’s an overview of the study that includes a link to the full white paper.
Tags: google