Is Google Doing It Again?

First created three centuries ago by William Fleetwood, a price index offers average prices of categories of goods or services during a particular time period in a given region. As a result, it is an important value in trade, comparing prices over time and between regions all of which reflect inflation or deflation, standard of living and normal good values. Today the Consumer Price Index (CPI), Producer Price Index (PPI) and GDP deflator are the most commonly used price indices

Though still unfinished, Google has yet another implement of its infinite information access, up its sleeve. An inspired Hal Varian, Google’s chief economist, in the hope of conveying inflation statistics has compiled vast amounts of related web data to create a Google Price Index (as an alternative to classic statistical data).

This “GPI” would offer a real time depiction of pricing in contrast to delayed, manually processed past indices such as the CPI. Though the tool may lack the depth of analysis that has garnered the CPI its enduring support and respect, the GPI is based primarily in goods sold online and therefore will be of much greater use to the masses.

Current observations have confirmed such potential, as the GPI has accurately offered values within less time as the CPI of similar products. Nonetheless, the GPI is merely in its infancy and will be meant as a supplement rather than competitor to existing records… for now.