Billion Prices Project
Definition
The Billion Prices Project (BPP) is an academic initiative that collects and analyzes prices from hundreds of online retailers around the world to measure inflation. It aims to provide real-time information on price changes and can serve as an alternative or supplement to traditional inflation indices.
5 Must Know Facts For Your Next Test
- The BPP collects data daily from millions of items sold by hundreds of retailers worldwide.
- It provides a more immediate reflection of price changes compared to traditional Consumer Price Index (CPI) methods.
- BPP data has been used in research to identify trends and economic conditions faster than official statistics.
- The project was initiated by MIT economists Alberto Cavallo and Roberto Rigobon.
- BPP's insights can help policymakers, economists, and businesses make more informed decisions regarding monetary policy and market strategies.
Review Questions
- What are the main advantages of using the Billion Prices Project over traditional measures like CPI?
- Who started the Billion Prices Project, and what was its primary purpose?
- How does the frequency of data collection in BPP compare with traditional inflation measurement methods?
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Related terms
Consumer Price Index (CPI): A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care.
Inflation: The rate at which the general level of prices for goods and services is rising, eroding purchasing power.
Real-Time Data: Information that is delivered immediately after collection without any delay.
