Sunday, 2 May 2004
Economic Indicators from the Web
An idea for the LazyWeb:
Purchasing Power Parity (PPP) is a measure of how much goods and services cost in different countries, irrespective of exchange rate; it’s a way to compare the true cost of living in different countries. The Economist popularised this concept with its Big Mac Index.
Why not use the Web to get a faster and more fine-grained indicator? Cost comparison purposes like Froogle could be used to automatically index the cost of goods in different countries and calculate a Web-based. Of course, that means Froogle will need to expand to more countries, but that shouldn’t be too hard; after all, Google has already indexed the Web pages.
Similarly, Froogle and similar services could be used to track the cost of goods over time, forming a Consumer Price Index.
I don’t think that online-sourced data can replace traditional measures of PPP and CPI, because there isn’t really yet an online market for milk and other staples (for example), and these are key components of these indicators. However, it would be a nice way to augment the existing information, and it would be cool to see a page on Google similar to the Zeitgeist, but with an economic bent.
There’s also not anything stopping people from putting up local prices in a machine-readable format to help collect this kind of data, a la FOAF.
Filed under: Economics