When Google was founded in 1988, its mission statement was to classify everything that is known. Google’s Larry Page said at the time “Basically, our goal is to organize the world’s information and to make it universally accessible and useful.”

Thanks to computer terminals built into cash registers and product ID scanning devices, one of the things we have come to know very well is shopping data. Guided by Google economist Hal Varian, Google is developing an alternative means of tracking inflation known as the Google Price Index (GPI). The goal of the effort is to provide more timely price index data based on the price of items sold online.

The often cited Consumer Price Index (CPI) provides a monthly measure of inflation based on pricing data gathered by hand from brick-and-mortar retailers along with other sources. The CPI data is published monthly and can be delayed by several weeks. Google’s method of utilizing online sources of pricing data offers a more real time reflection of pricing indexes.

As reported in the Financial Times, the Google system will not replace CPI since it represents a different sector of goods and services. Housing accounts for 40 percent of the CPI in the United States but only 18% of the GPI. Consumer goods are in line with the CPI while goods like cars, which are bought less frequently online differ. Google products like Google Merchant Center and Google Checkout also represent a large collection of online pricing data. Using this data to create a price index which might aid economists in creating more accurate price indexes falls in the more “useful” category of Google’s global vision. As a life insurance search engine that is organizing quotes from America’s leading life insurance companies, Efinancial can more than appreciate the contribution that search technology is making to our society. Find the insurance rates and coverage you are searching for by starting with the quick FREE QUOTE box on the right.

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