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Excellent - especially enjoyed the sex and babies one.

Google trends is, of course, normalized for the volume of traffic. So I suspect the sex trends reveal is a decline in the *relative* # of sex searches, as the internet becomes less dominated by, shall we say, a certain demographic, as opposed to an *absolute* decline in sex related searches.

if you type new house, new condo into google trends you can get the two on the same graph. Condo still a tiny fraction of house.

I remember a decade or so ago, people were talking about doing the same sort of thing with 7-11 or Walmart sales data. The theory was that their computerized inventory and sales data would give you real-time information about consumption patterns. If people stop buying steaks and start buying ground (wood)chuck, or start buying single cans, rather than 6-packs, time to brace for impact.

Mind you, as a forecasting tool it suffered from the distinct disadvantage that the information was the private, and very secret, property of the retailer.

We had Hal Varian talk about Google Insight at our real-time conference in Philadelphia a couple of years ago and while he pitched its potential, I've yet to see anyone make successful use of it for business cycle analysis. I'm still trying to understand how to get around two basic stumbling blocks.

1) Baseline drift. If Google tells me that the number of searches for "recession" has gone from 5 in 2004 to 4 now, I'd like to know how the total number of Google searches trended over that period, so that I can better understand how it compares.

2) Short data span. As Livio pointed out, this really hamstrings those who want to study business cycles. To make sense of a predictor, you need to see how it performs over several recessions. So far, we have one observation.

Of course, other Google data seems to be used with great success in the Billion Prices Project (bpp.mit.edu).

Don't forget Google Insights. You can do geographical comparisons over time:
http://www.google.com/insights/search/#q=housing%20bubble&geo=US%2CCA%2CAU&cmpt=geo

Perhaps "sex" is in gradual decline as a search term because most users already have their favorite bookmarks? When confronted with an overwhelming number of goods, people may make rush decisions.

Further to Shangwen's point, "girl on girl" shows a strong positive upwards trend, as do some other words that I won't type here for fear of attracting spam.

@Frances: Specialization! Of course.

Livio: The linguist Mark Liberman, at U Penn, has a good discussion of problems in using search and corpus data here. Google Books' data set is certainly older, though not necessarily larger than Google Trends data, depending on the popularity and recency of the term.

Thanks for the Liberman reference Shangwen. There needs to be a methodology for the searches using economic terms if they are going to be used as an indicator. Moreover, given how language changes over time, the methodology would also need to incorporate some method of modifying the searches to take language and terminology changes into account.

Your economic growth details are very effective.Then your graphical presentation are nice.

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