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Introducing the World's Most Accurate Inflation Tracker


BargainValueHunter
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http://www.econbrowser.com/archives/2010/11/billion_prices.html

 

The basic idea of the Billion Prices Project is to automate search of websites around the world that report prices at which various vendors are offering to sell specific items. By comparing that price with that for the identical product posted the previous day by the same vendor, the MIT researchers obtain a measure of when and by how much each price changes. This is of interest both for economic theories about the nature of price changes and for providing up-to-date real-time assessments of broader inflation trends.

 

From the perspective of economic theory, one of the project's most interesting findings is that when vendors change the price, they are more likely to make a large change rather than a small one, giving the distribution of price changes a bimodal shape. This is in contrast to earlier research using scanner sales data or individual CPI components, which had suggested that small price changes were quite common.

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