Working Paper: NBER ID: w26116
Authors: Gabriel Ehrlich; John Haltiwanger; Ron Jarmin; David Johnson; Matthew D. Shapiro
Abstract: Traditional methods of collecting data from businesses and households face increasing challenges. These include declining response rates to surveys, increasing costs to traditional modes of data collection, and the difficulty of keeping pace with rapid changes in the economy. The digitization of virtually all market transactions offers the potential for re-engineering key national economic indicators. The challenge for the statistical system is how to operate in this data-rich environment. This paper focuses on the opportunities for collecting item-level data at the source and constructing key indicators using measurement methods consistent with such a data infrastructure. Ubiquitous digitization of transactions allows price and quantity be collected or aggregated simultaneously at the source. This new architecture for economic statistics creates challenges arising from the rapid change in items sold. The paper explores some recently proposed techniques for estimating price and quantity indices in large-scale item-level data. Although those methods display tremendous promise, substantially more research is necessary before they will be ready to serve as the basis for the official economic statistics. Finally, the paper addresses implications for building national statistics from transactions for data collection and for the capabilities and organization of the statistical agencies in the 21st century.
Keywords: national economic indicators; data collection; digitization; item-level data
JEL Codes: C81; C82; E31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| digitization of market transactions (G10) | simultaneous collection of price and quantity data (C82) |
| simultaneous collection of price and quantity data (C82) | improved economic statistics (E01) |
| use of item-level data (C81) | enhanced granularity of statistics (C55) |
| enhanced granularity of statistics (C55) | better tracking of economic indicators (E01) |
| improvements in accuracy of economic indicators (E01) | better tracking of economic indicators (E01) |