Inflation indices are important inputs into measuring aggregate productivity and cost of living and conducting monetary and economic policy. We want to contribute to the science of inflation measurement based on quality-adjusted (hedonic) prices. The main challenges today are:
(1) the global trade environment (millions of products);
(2) frequent price changes;
(3) extremely high turnover for some products (e.g., apparel, electronics).
Our teams addressed these challenges to produce a method that utilizes scalable AI and econometrics tools to predict quality-adjusted prices using text and image embeddings.
New goods, productivity and the measurement of inflation
2020
Research areas