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Billion Prices Project: Introducing real-time economics

MIT Sloan faculty project to track inflation in real time collects prices from hundreds of worldwide online retailers on a daily basis.
Snapshot of data gathered by the Billion Price Project.
Snapshot of data gathered by the Billion Price Project.

The Billion Prices Project (BPP), an initiative started by a pair of alumni who are MIT Sloan School of Management professors, collects prices from hundreds of online retailers around the world on a daily basis to create an Internet-based resource that measures price changes from around the world and gives real-time inflation estimates.

Currently BPP monitors daily price fluctuations of approximately 5 million items sold by 300-plus online retailers in more than 70 countries. That's a lot of numbers — and crunching them is producing results. Consult the Inflation Map, for example, to drill down to a country of interest for its daily price index and inflation rate for each of the past 365 days.

The co-founders, Alberto Cavallo MBA '05 and Roberto Rigobon PhD '97, are both members of Sloan's Applied Economics Group, with expertise in Latin American economics. They are also using the data to investigate price-stickiness, price adjustments to shocks, the relationship between asset and retail prices, sales strategies and premiums paid for green or organic products around the world.

Index Universe says the project provides pricing data at much greater speed than conventional inflation indices, but also in greater detail across countries.

Read the rest of the Slice of MIT post for more comments and the News@MITSloan article for the project's background.

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