Article | Journal of Economic Perspectives | Spring 2016

The Billion Prices Project: Using Online Prices for Inflation Measurement and Research

by Alberto Cavallo and Roberto Rigobon

Abstract

New data-gathering techniques, often referred to as “Big Data” have the potential to improve statistics and empirical research in economics. In this paper we describe our work with online data at the Billion Prices Project at MIT and discuss key lessons for both inflation measurement and some fundamental research questions in macro and international economics. In particular, we show how online prices can be used to construct daily price indexes in multiple countries and to avoid measurement biases that distort evidence of price stickiness and international relative prices. We emphasize how Big Data technologies are providing macro and international economists with opportunities to stop treating the data as “given” and to get directly involved with data collection.

Keywords: billion prices project; online scraped data; online price index; Economics; Research; Price;

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Citation:

Cavallo, Alberto, and Roberto Rigobon. "The Billion Prices Project: Using Online Prices for Inflation Measurement and Research." Journal of Economic Perspectives 30, no. 2 (Spring 2016): 151–178.

Supplemental Information

  1. Data Files

    This dataset contains the data files needed to generate the graphs in the paper.

  2. Appendix

  3. Replication Files

    Contains the do files (scripts) and folder structure needed to replicate the graphs in the paper. The data files downloaded from the Harvard Dataverse need to be saved in the "RAWDATA" folder.

About the Author

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Alberto F. Cavallo
Edgerley Family Associate Professor of Business Administration
Business, Government and the International Economy

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