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"Big Data" for Macro and International Economics
The Billion Prices Project was an academic initiative at MIT and Harvard that used prices collected from hundreds of online retailers around the world on a daily basis to conduct research in macro and international economics. It was founded in 2008 by Alberto Cavallo and Roberto Rigobon, and remained active until 2016. Our research continues through related projects listed below. Additional and more recent papers can also be found in our personal academic pages.
Inflacion Verdadera Argentina
A daily inflation index for Argentina. Published from 2007 to 2018 as an alternative to the official CPI which was manipulated by the government during the period 2007-2016.
Inflacion Verdadera Venezuela
A daily inflation index for Venezuela from 2017 to 2020 using crowd-sourced data collected with mobile phones.
PriceStats Daily Inflation Indicators
Since 2010, PriceStats has been collecting online prices and computing daily inflation and PPP indicators in over 20 countries.
Alberto Cavallo, Gita Gopinath, Brent Neiman, and Jenny Tang
We use micro data collected at the border and the store to characterize the price impact of recent US trade policy on importers, exporters, and consumers. At the border, import tariff passthrough is much higher than exchange rate passthrough. Chinese exporters did not lower their dollar prices by much, despite the recent appreciation of the dollar. By contrast, US exporters significantly lowered prices affected by foreign retaliatory tariffs. In US stores, the price impact is more limited, suggesting that retail margins have fallen. Our results imply that, so far, the tariffs’ incidence has fallen in large part on US firms.
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Alberto Cavallo
I study how online competition, with its algorithmic pricing technologies and the transparency of the Internet, can change the pricing behavior of large retailers and affect aggregate inflation dynamics. In particular, I show that online competition has raised both the frequency of price changes and the degree of uniform pricing across locations in the U.S. over the past 10 years. These changes make retail prices more sensitive to aggregate “nationwide” shocks, increasing the pass-through of both gas prices and nominal exchange rate fluctuations.
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Alberto Cavallo
Online prices are increasingly used for measurement and research applications, yet little is known about their relation to prices in physical stores, where most retail transactions occur. I conduct the first large-scale comparison of prices simultaneously collected from the websites and physical stores of 56 large multi-channel retailers in 10 countries. I find that price levels are identical about 72 percent of the time. Price changes are not synchronized but have similar frequencies and average sizes. These results have implications for national statistical offices, researchers using online data, and anyone interested in the effect of the Internet on retail prices.
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