Google Domestic Trends
by Brad on Sep.04, 2009, under Economic Outlook
Google is introducing what I believe to be the most insightful tool in the history of economic analysis.
We have long believed that Google’s ability to track and measure public interest put them in a position to analyze economic, retail, political trends unlike ever before.
The problem with statistics is that the slightest bit of lag makes analysis obsolete before it is ever compiled and delivered. Because search query data is logged and incorporated in real time, the argument could credibly be made that this is the most pertinent and effective research data available.
While it is incredibly interesting to view the search data as it stands, the real power of economic insight and prediction is found in comparing the domestic trends data with as reported data in tandem. Though it’s somewhat dated, Google’s Chief Economist Hal Varian details how they built a model to forecast initial jobless claims in this link. Google’s Initial Jobless Claims
Let me be clear, there is certainly continued need for the data that is gathered and reported regularly. This doesn’t make other economic data obsolete. There are some pieces of information that simply cannot be acquired through search queries. Also, in some cases, looking at information too often can actually create a problem, thus the concept of smoothing in moving averages.
Much can be said about Google’s invasion of privacy and its role as “Big Brother” in today’s society, but so long as they continue to make the information available to the average person, at no cost – nonetheless, good on them.
