Google Searches Predict Stock Market Crashes – Business Insider

Google Searches Predict Stock Market Crashes – Business Insider

Jul. 29, 2014, 3:24 PM
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Researchers from Boston University and

Warwick Business School have found a way to identify what people are Google searching right before a stock market fall.

The researchers took the painstaking liberty of categorizing every word on Wikipedia into different topics — the words “management,” “business,” and “bank” would fall under the broader category of “business,” according to Fast Company.

From there, the teams of researchers used Google Trends to figure out how often each week U.S. internet users searched for these words between 2004 and 2012.

“By mining these data sets, we were able to identify a historic link between rises in searches for terms for both business and politics, and a subsequent fall in stock market prices,” Suzy Moat, a professor of behavioral science at Warwick Business School, said in a statement.

Their study, “Quantifying the semantics of search behavior before stock market moves,” was published in the Proceedings of the National Academy of Sciences. Their research suggests that this method could be applied to identify search terms before any real-world disaster — not just a stock market crash.

SEE ALSO: Spain Just Passed An Insane Law Taxing Google For Linking To News

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Google Searches Predict Stock Market Crashes – Business Insider

See which stocks are being affected by Social Media

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