Inflation and the Billion Prices Project at MIT

For those of us who are interested in inflation, and who also have a few concerns about the government reporting methods, this might be of interest.

The Massachusetts Institute of Technology has had a project underway since 2007, to monitor the prices of many goods, in several countries. The project "collects prices from hundreds of online retailers around the world on a daily basis to conduct economic research. We currently monitor daily price fluctuations of ~5 million items sold by ~300 online retailers in more than 70 countries."

The statistical information is showcased on the webpages as examples of average inflation indexes. The goal at MIT is to develop "econometric models that leverage the data to forecast future trends and conduct economic research."

BPP DATABASE KEY FACTS
-Statistics updated every day
-5 million individual items
-70 countries
-Started in October of 2007
-Supermarkets, electronics, apparel, furniture, real estate, and more.

The MIT project tracks online retailers. So, as soon as prices change, so do the statistics in the BPP project. If accurate, the BPP data would be available much faster than the government data, which lags because the government statistics are released two weeks after the month in question.

Charts available, which compare the BPP data with the Consumer Price Index (CPI-U) include:

• Daily Online Price Index
• Annual Inflation
• Monthly inflation

Here's a snapshot of the "Annual Inflation" chart, for the U.S., taken January 25, 2011:

To view this information, go to the following link and select "USA" from the pull-down menu. Then click on the "Show" button.
MIT - BPP - Daily Price Indexes

References, Errors, Omissions, Comments:
1)Other countries are available at the MIT site. 
2) I find it interesting that the MIT data and the U.S. government released data track.  I'm unsure of exactly what is included in the MIT pricing, and what might not be. It does include fresh food. I'll be doing more research on this as time permits.