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Constructing Consumer Sentiment Index for U.S. Using Google Searches

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Author Info

  • Della Penna, Nicolas

    ()
    (Unknown)

  • Huang, Haifang

    ()
    (University of Alberta, Department of Economics)

Abstract

We construct a consumer sentiment index for the U.S. using the popularity trends of selected Google searches. The final index consists of four components and is highly correlated with the Index of Consumer Sentiment from the University of Michigan and the Consumer Confidence Index from the Conference Board. Among the three sentiment indices, the Google search-based index (SBI) leads in time and predicts other indices. In terms of forecasting consumer spending, the SBI outperforms both the ICS and the CCI and provides independent information. For robustness, we use multiple measures of consumer spending and a range of statistical specifications. The finding is robust.

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File URL: http://www.economics.ualberta.ca/~/media/economics/FacultyAndStaff/WPs/WP2009-26-HuangH.pdf
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Bibliographic Info

Paper provided by University of Alberta, Department of Economics in its series Working Papers with number 2009-26.

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Length: 22 pages
Date of creation: 01 Oct 2009
Date of revision: 01 Feb 2010
Handle: RePEc:ris:albaec:2009_026

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Related research

Keywords: consumer sentiment; consumer confidence; leading economic indicators;

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Cited by:
  1. Briggs, Justin Thomas & Tabarrok, Alexander, 2014. "Firearms and suicides in US states," International Review of Law and Economics, Elsevier, vol. 37(C), pages 180-188.
  2. Yan Carrière-Swallow & Felipe Labbé, 2010. "Nowcasting With Google Trends in an Emerging Market," Working Papers Central Bank of Chile 588, Central Bank of Chile.

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