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What Drives the Difference between Online and Official Price Indexes?

Author

Listed:
  • Oleksandr Faryna

    (National Bank of Ukraine, National University of “Kyiv-Mohyla Academy”)

  • Oleksandr Talavera

    (Swansea University, UK)

  • Tetiana Yukhymenko

    (National Bank of Ukraine)

Abstract

This paper examines the associations between online price indexes and official statistics. First, we generate online CPI component sub-indexes, which are later aggregated to an Online Price CPI. This approach is applied to our unique dataset which contains about 3 million observations of online retail prices for consumer goods in Ukraine’s five largest cities. The data span over the period 2016m1 – 2017m12 and cover about 46% of Ukraine’s Consumer Price Inflation basket. We find that online inflation is generally consistent with official estimates, but the matching capability varies across sub-indexes. Although the differences can partially be explained by poor dataset coverage, we find that online prices may indeed represent new information that is not captured by official statistics.

Suggested Citation

  • Oleksandr Faryna & Oleksandr Talavera & Tetiana Yukhymenko, 2018. "What Drives the Difference between Online and Official Price Indexes?," Visnyk of the National Bank of Ukraine, National Bank of Ukraine, issue 243, pages 21-32.
    • Handle: RePEc:ukb:journl:y:2018:i:243:p:21-32
    DOI: 10.26531/vnbu2018.243.021
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    File URL: https://journal.bank.gov.ua/en/article/2018/243/02
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    References listed on IDEAS

    as
    1. Cavallo, Alberto, 2013. "Online and official price indexes: Measuring Argentina's inflation," Journal of Monetary Economics, Elsevier, vol. 60(2), pages 152-165.
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    More about this item

    Keywords

    Online prices; web scraping; consumer price index; micro prices; big data;
    All these keywords.

    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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