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The Proper Use of Google Trends in Forecasting Models

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arxiv 2104.03065 v3 pith:L74MEJQ5 submitted 2021-04-07 econ.EM cs.LGstat.APstat.ML

classification econ.EMcs.LGstat.APstat.ML
keywords googletrendsbecomedatadifferentsearchwidelyacademics
verification ladder T0 review T1 audit T2 compute T3 formal
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It is widely known that Google Trends have become one of the most popular free tools used by forecasters both in academics and in the private and public sectors. There are many papers, from several different fields, concluding that Google Trends improve forecasts' accuracy. However, what seems to be widely unknown, is that each sample of Google search data is different from the other, even if you set the same search term, data and location. This means that it is possible to find arbitrary conclusions merely by chance. This paper aims to show why and when it can become a problem and how to overcome this obstacle.

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