Nowcasting Prices Using Google Trends : An Application to Central America
The objective of this study is to assess the possibility of using Internet search keyword data for forecasting price series in Central America, focusing on Costa Rica, El Salvador, and Honduras. The Internet search data comes from Google Trends. Th...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/08/24925642/nowcasting-prices-using-google-trends-application-central-america http://hdl.handle.net/10986/22655 |
| Summary: | The objective of this study is to assess
the possibility of using Internet search keyword data for
forecasting price series in Central America, focusing on
Costa Rica, El Salvador, and Honduras. The Internet search
data comes from Google Trends. The paper introduces these
data and discusses some of the challenges inherent in
working with it in the context of developing countries. A
new index is introduced for consumer search behavior for
these countries using Google Trends data covering a two-week
period during a single month. For each country, the study
estimates one-step-ahead forecasts for several dozen price
series for food and consumer goods categories. The study
finds that the addition of the Internet search index
improves forecasting over benchmark models in about 20
percent of the series. The paper discusses the reasons for
the varied success and potential avenues for future research. |
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