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What Drives the Difference between Online and Official Price Indexes?

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


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


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

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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

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