Using Online Prices for Measuring Real Consumption Across Countries

14 Pages Posted: 18 May 2018 Last revised: 18 May 2023

See all articles by Alberto Cavallo

Alberto Cavallo

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Erwin Diewert

University of British Columbia (UBC)

Robert C. Feenstra

University of California, Davis - Department of Economics; National Bureau of Economic Research (NBER)

Robert Inklaar

University of Groningen - Department of Economics

Marcel P. Timmer

University of Gronigen - Faculty of Economics

Date Written: February 2018

Abstract

We show that online prices can be used to construct quarterly purchasing power parities (PPPs) with a closely-matched set of goods and identical methodologies in a variety of developed and developing countries. Our results are close to those reported by the International Comparisons Program (ICP) in 2011 and the OECD in 2014, and can be used to obtain more up-to-date estimates of real consumption across countries without the need for consumer price index extrapolations. We discuss advantages and limitations associated with the use of online prices for PPs, including issues of representativeness and limited coverage of product categories and countries.

Suggested Citation

Cavallo, Alberto and Diewert, Erwin and Feenstra, Robert C. and Inklaar, Robert and Timmer, Marcel P., Using Online Prices for Measuring Real Consumption Across Countries (February 2018). NBER Working Paper No. w24292, Available at SSRN: https://ssrn.com/abstract=3180460

Alberto Cavallo (Contact Author)

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

Erwin Diewert

University of British Columbia (UBC) ( email )

2329 West Mall
Vancouver, British Columbia BC V6T 1Z4
Canada

Robert C. Feenstra

University of California, Davis - Department of Economics ( email )

One Shields Drive
Davis, CA 95616-8578
United States
916-752-9240 (Phone)
916-752-9382 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Robert Inklaar

University of Groningen - Department of Economics ( email )

P.O. Box 800
9700 AV Groningen
Netherlands

Marcel P. Timmer

University of Gronigen - Faculty of Economics ( email )

Postbus 72
9700 AB Groningen
Netherlands

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
89
Abstract Views
399
Rank
549,282
PlumX Metrics