Predicting food price inflation through online prices in India

Abstract

Food and beverages price data from a leading online marketplace is used to compute an online price index. This index successfully tracks the offi cial consumer price index not only at the aggregate level, but also at the subgroup level. The results indicate that online prices can be a quick and effi cient source of price data, which can provide a cheap, but credible, signal of infl ationary pressures on a real-time basis.