The purpose of this paper is to investigate the extent to which the authors can use internet search data in order to capture the impact of the 2008 Financial and Economic Crisis on well-being.
The authors look at the G8 countries with a special focus on USA and Germany and investigate whether internet searches reflect the “malaise” caused by the crisis. The authors focus on searches that contain the word “symptoms” and are thought to proxy self-diagnosis and those that contain “side effects” and are thought to proxy treatment.
The authors find that “malaise” searches spike in a fashion coincident with the crisis and its contagion timeline across the G8 countries. The authors show that results based on search recover previously known stylized facts from the economics of health, well-being and the business cycle.
Internet penetration is high across the G8 countries. The authors nonetheless cannot get a good handle on the part of the population, which is not online. Moreover the authors cannot get a good grip on all confounding factors. More research would be necessary with access to search microdata.
The authors propose global proxies for diagnosis and treatment based on the “search buzz” for symptoms and side effects. The authors can thus capture trends on a global scale. This approach will become increasingly important.
JEL Classification – C81, E32, I1, L86
The authors thank the Google Trends team for extensive discussions and clarifications regarding Google Trends Data in general, Hilmar Schneider, Konstantinos Tatsiramos and Rainer Winkelmann for reading earlier versions of the manuscript and the participants of IZA’s Brown Bag Seminar for interesting comments. The authors also thank an anonymous referee for kind and helpful comments as well as Corrado Giulietti for acting as the Editor for this paper.
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