The price is right
Inflation is a crucial economic indicator, since rising prices can hurt consumers and trigger political discontent. It is also hard to measure. In the United States, Bureau of Labor Statistics employees track over 20,000 prices in person or via phone, which are then aggregated into the Consumer Price Index, a monthly gauge of price levels. But what if the Internet could help measure inflation, and in real time? That is the aim of an ambitious new enterprise, the Billion Prices Project, launched by Roberto Rigobon and Alberto Cavallo, two professors at the MIT Sloan School of Management.By refining a program that culls prices from the Web, the Billion Prices Project now tracks more than 5 million consumer items every day, sampled from more than 70 countries. The project began collecting price data in 2007 and became publicly available in November.“We thought it would be great to capture price information on...