Predicting the Economy with Google
According to Google’s economist, Hal Varian, less searches are being made for unemployment benefits. This drop began in March and has continuously declined since. Google has also showed increased interest in the housing market and real estate. This leads some to believe that government agencies should consider using search data as another way of understanding the state of the economy.
In the past, Google has already shown to be good at tracking yearly flu outbreaks with surprising accuracy based on people’s searching habits. It gives a real-time snapshot of who is searching for flu keywords, and is much quicker than relying on hospital data.
It is almost surprising how reliable this data can be, and I can see how it would be useful to begin incorporating this data as another way of testing the state of the economy. In fact, I’m a little surprised that this information hasn’t been used before.
