Premium
Nowcasting with Google Trends in an Emerging Market
Author(s) -
CarrièreSwallow Yan,
Labbé Felipe
Publication year - 2013
Publication title -
journal of forecasting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.543
H-Index - 59
eISSN - 1099-131X
pISSN - 0277-6693
DOI - 10.1002/for.1252
Subject(s) - nowcasting , index (typography) , benchmark (surveying) , the internet , sample (material) , computer science , automotive industry , aggregate (composite) , population , econometrics , economics , geography , world wide web , engineering , chemistry , materials science , demography , geodesy , chromatography , aerospace engineering , sociology , meteorology , composite material
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 aggregate consumer behavior in an emerging market. Using data on Google search queries, we introduce an index of online interest in automobile purchases in Chile and test whether it improves the fit and efficiency of nowcasting models for automobile sales. 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 out‐of‐sample nowcasts, provide substantial gains in information delivery times, and are better at identifying turning points in the sales data. Copyright © 2011 John Wiley & Sons, Ltd.