The Billion Prices Project is an interesting new take on inflation created by Professors Roberto Rigobon and Alberto Cavallo at the MIT Sloan School of Management. Their extensive data collection process gives a real-time view of price changes. The latest reading at 1.8% is not exactly the frightening inflation story that many people would have you believe….
“Data collection: our data is collected every day from online retailers using a software that scans the underlying code in public webpages and stores the relevant price information in a database. The resulting dataset contains daily prices on the full population of products sold by individual retailers, allowing us to observe every single price change that takes place. Our data includes information on product descriptions, package sizes, brands, special characteristics (e.g. “organic”), and whether the item is on sale or price control. For more details on the collection methodology, see Cavallo (2010) “Scraped Data and Sticky Prices”.”
Source: MIT BPP