Description

Most economic variables are released with a lag, making it difficult for policy-makers to make an accurate assessment of current conditi ons. This paper explores whether observing Internet browsing habits can inform practitio ners about real-time aggregate consumer behavior in an emerging market. Using da ta on Google search que ries, we introduce a simple index of interest in automobile purchases in Chile and test whether it improves the fit and efficiency of nowcasting models for automobile sales. We also examine to what extent our index helps us identify turning point s in sales data. Despite relatively low rates of Internet usage among the population, we find that models incorporating our Google Trends Automotive Index outperform benchmar k specifications in both in-sample and out- of-sample nowcasts while providing substantial gains in information delivery times.