CAMBRIDGE, Mass., Nov. 8, 2010 – Inflation is a significant measurement for the economic health of countries around the world, but rates are often reported weeks after data is collected. To address this problem, Professors Roberto Rigobon and Alberto Cavallo at MIT Sloan School of Management have launched the Billion Prices Project (http://bpp.mit.edu), the first Website to publish daily price indexes and provide real-time inflation estimates around the world.
Over the past three years, the team developed a methodology to systematically collect prices of items sold by online retailers and compute inflation statistics on a daily basis. More than 5 million prices are monitored every day from categories such as food and beverages, household products, electronics, apparel, and real estate. While the project tracks prices in more than 50 countries, it currently publishes data for a smaller subset that includes the U.S. and U.K. as well as Argentina, Australia, Brazil, Chile, China, Colombia, France, Italy, Turkey, and Venezuela.
According to Rigobon, the project provides pricing data not only faster than what is currently available, but also in greater detail across countries. He points to the earthquake in Chile last winter as an example. “We tracked the prices of basic foods, water, and construction materials after the earthquake, which would be helpful information for government leaders trying to make decisions in real time.”