The HSE Develops Tool for E-commerce Price Tracking
The Higher School of Economics has developed an internet inflation index to measure fluctuations in online retail prices.
As Nikolay Kondrashov, a junior researcher at the HSE's Centre for Development, explained, creating an internet inflation index was one of the first results of a joint project between the Finmarket Information Agency (part of the Interfax Group), Yandex.Market, and the HSE's Centre for Development which provided the methodology for calculating the index.
Yandex.Market data on customer clicks on links to vendor sites—which, according to the index’s developers, can reliably serve as a proxy for purchasing behavior—are used to calculate the average weekly price, the number of clicks per week, and the total value of the demand (ie the total value of all offers that have attracted customers) for each product model. Models that have not attracted any clicks in a given week are not taken into account.
"Our calculations use only prices that interest customers; therefore, we take into account both supply and demand factors, whereas 'ordinary' inflation indices take into account only the supply side, ie prices offered by retailers”, explained Kondrashov. According to the project participants, they did not intend to challenge the official inflation figures. The original idea, which Alexander Kiyatkin from Finmarket brought to the HSE's Centre for Development, was to create a mechanism for tracking online retail prices. This mechanism monitors consumer price dynamics in e-commerce which only partly overlaps with the brick-and-mortar stores traditionally covered by Russia's state statistics agency—Rosstat.
The study uses information from Yandex.Market accumulated over 18 months. The current version of the index covers Yandex.Market’s 10 most popular product categories: including mobile phones, tablets, laptops, TVs, cameras, fridges, electric cooking appliances, wristwatches, electronic storage devices, and washing machines. The developers plan to take this project further and add new product categories in the near future. With the increasing popularity of e-business and the expansion of online stores and sales, the internet inflation index will be even more representative, says Kondrashov.
Ludmila Mezentseva, HSE News Service
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