Оld version

Home » Publications » Visnyk of the National Bank

What Drives the Difference between Online and Official Price Indexes?



Visnyk of the National Bank of Ukraine, 2018, No. 243, pp. 21-32

https://doi.org/10.26531/vnbu2018.243.021


What Drives the Difference between Online and Official Price Indexes?

Oleksandr Faryna ab , Oleksandr Talavera c , Tetiana Yukhymenko a

a National Bank of Ukraine, Kyiv, Ukraine

b National University of Kyiv-Mohyla Academy, Kyiv, Ukraine

c Swansea University, Swansea, UK


Abstract

This paper examines the associations between online price indexes and official statistics. First, we generate online CPI component sub-indexes, which are later aggregated to an Online Price CPI. This approach is applied to our unique dataset which contains about 3 million observations of online retail prices for consumer goods in Ukraine’s five largest cities. The data span over the period 2016m1 – 2017m12 and cover about 46% of Ukraine’s Consumer Price Inflation basket. We find that online inflation is generally consistent with official estimates, but the matching capability varies across sub-indexes. Although the differences can partially be explained by poor dataset coverage, we find that online prices may indeed represent new information that is not captured by official statistics.


JEL Codes: C55, E31, E37

Keywords: online prices, web scraping, consumer price index, micro prices, big data

Full text (PDF)


Citation: Faryna O., Talavera O., Yukhymenko T. (2018). What Drives the Difference between Online and Official Price Indexes? Visnyk of the National Bank of Ukraine, No. 243, pp. 21-32. https://doi.org/10.26531/vnbu2018.243.021

Citation Format:


References


• Breton R., Clews G., Metcalfe L., Milliken N., Payne C., Winton J., Woods A. (2015). Research Indexes Using Web Scraped Data. Office for National Statistics, UK.


• Cavallo A., Rigobon R. (2016). The Billion Prices Project: Using Online Prices for Measurement and Research. Journal of Economic Perspectives, Vol. 30, No. 2, pp. 151–178. https://doi.org/10.1257/jep.30.2.151


• Cavallo A. (2013). Online and Official Price Indexes: Measuring Argentina's Inflation. Journal of Monetary Economics, Vol. 60, Issue 2, pp. 152-165. https://doi.org/10.1016/j.jmoneco.2012.10.002


• Coupe T., Petrusha E. (2014). Can We Trust Official Inflation Measures? A Check Based on Inflation at Ukrainian Online Supermarkets. Focus Ukraine.


• Griffioen R., Haan J., Willenborg L. (2014). Collecting Clothing Data from the Internet. Proceedings of Meeting of the Group of Experts on Consumer Price Indexes, May 26–28.


• Gorodnichenko Y., Talavera O. (2017). Price Setting in Online Markets: Basic Facts, International Comparisons, and Cross-Border Integration. American Economic Review, Vol. 107, No. 1, pp. 249-282. https://doi.org/10.1257/aer.20141127


• Hammond G. (2011). State of the Art Inflation Targeting. Center for Central Banking Studies Handbook, No. 29, Bank of England, London.


• Horrigan M. W. (2013). Big Data: A Perspective from the BLS. Amstat News, January 1. Available at http://magazine.amstat.org/blog/2013/01/01/sci-policy-jan2013/


• Jahan S. (2017). Inflation Targeting: Holding the Line. Finance & Development (IMF). Available at http://www.imf.org/external/pubs/ft/fandd/basics/target.htm


• Krsinich F. (2015). Price Indexes from Online Data Using the Fixed-Effects WindowSplice (FEWS) Index. Paper presented at the Ottawa Group, Tokyo, Japan, May 20-22, 2015.


• Nygaard R. (2015). The Use of Online Prices in the Norwegian Consumer Price Index. Paper prepared for the meeting of the Ottowa Group, Tokyo, Japan, May 20–22, 2015.


• Roger S. (2010). Inflation Targeting Turns 20. Finance & Development, Vol. 47, No. 1, IMF, pp. 46-49.




This article is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

  Top