Hal Varian writes in this morning’s New York Times about the importance of online sales as a source of economic data.
It is much easier to collect online prices than offline prices, and with a little bit of ingenuity, you can even harvest data about costs and sales volume, information that is awfully hard to come by in the real world.
The economists Michael R. Baye and Patrick Scholten of Indiana University and John Morgan of the University of California at Berkeley have collected data from online price-comparison sites for over two years. They offer summaries of this information at www.nash-equilibrium.com.
Take a look, for example, at their measure of “Internet competitiveness,” an aggregate statistic of various indicators of how competitive online prices are.