A study into people’s search habits has revealed that search engines like Google could predict when events like an economic crash could happen.
Researchers from Warwick Business School found that there was a clear link between search terms and the state of the economy. An analysis of search terms between 2004 and 2012 discovered that an increase of people searching for business and politics topics preceded the economic downturn.
The study suggests that search data could provide an ‘early warning system’ for stock market crashes.
During the study, researchers used complex computer systems to look through a vast amount of internet traffic in order to identify trends in a broad number of topics. Research Fellow Chester Curme said: “Search engines, such as Google, record almost everything we search for. Records of these search queries allow us to learn about how people gather information online before making decisions in the real world.
“So there’s a huge potential to use these search data to anticipate what large groups of people may do.
“However, the number of possible things people could search for is huge. So an important challenge is to identify what types of words may be relevant to behaviours of interest.”
The research team calculated the meaning of every single word on Wikipedia in order to enable algorithms to automatically identify search patterns. These words were categorized into topics, for example the topic ‘business’ could include words such as ‘bank’ ‘business’ and ‘management’.
The researchers then used Google Trends to see how frequently thousands of these words were searched for, and discovered the fascinating correlation between internet searches and real time economic crisis.