Daily Tracking of Commodity Prices: the e-Bread Index (2011)
PROGRAMME AREA: Food & Agriculture
LAB: New York
This project investigates and shows how scraping online prices could provide real-time insights on price dynamics, focusing on the case of bread in 6 Latin American countries.
The objective of this project was to investigate and show how scraping the web for online prices could provide real-time insights on price dynamics, focusing on the case of bread. The data is collected in Argentina, Brazil, Chile, Colombia, Uruguay and Venezuela using a scraping software that records, on a daily basis, the price of bread sold or advertised in online supermarkets. Then the daily inflation rate of bread for each country is calculated. Then, subsequently, the average daily inflation rate for each of the bread products is estimated, and an index aggregating those daily changes, is built by country. All the bread products are equally counted and the resulting inflation is the geometric average of their daily price inflation.
The daily e-bread index - built on data extracted from online retailers - from 1st March 2010 to 1st November 2011 shows the change in prices of bread (normalized to the 1st March).
Argentina and Venezuela indicators show a quasi-monotonous increase in prices, while Brazil, Chile, Colombia and Uruguay tended to fluctuate, somewhat reflecting the behavior of wheat prices. Overall, the e-bread indexes do indeed follow a similar trend as the official consumer price index for the food basket; for example, Uruguay has a very high correlation with the specific CPI for bread and cereals. The difference is that online prices can be obtained daily whilst consumer price indices in most countries are only published on a monthly basis. Overall, this case study shows the potential offered by online marketplaces to scrape prices in real time and construct highly reactive inflation measures that complement other existing sources of data.
The e-Bread index for Uruguay strongly correlates with the Bread & Cereals consumer price index.