Financial Times | Robin Harding | Google Plans Alternative Inflation Index Using Web DataThis is why I love Google.
Google is using its vast database of web shopping data to construct the ‘Google Price Index’ – a daily measure of inflation that could one day provide an alternative to official statistics.
The work by Google’s chief economist, Hal Varian, highlights how economic data can be gathered far more rapidly using online sources. The official Consumer Price Index data are collected by hand from shops, and only published monthly with a time lag of several weeks.
At the National Association of Business Economists conference in Denver, Colorado, Mr Varian said that the GPI was a work in progress and Google had not yet decided whether to publish it.
Back in undergrad one of my housemates walked into my room and asked me what the multicolored animation thing I was working on was. I told him it was a toy simulation of forest fire dynamics, but extended to three dimensions. "Why are you doing that?" he asked. I gave him the modified George Mallory: "Because it's possible." That's the same answer Google gives.
Google is doing all this outrageous stuff, like making their own price index or their own automated car, because they can. It doesn't really fit into search. It's not monetizable (yet). But they have loads of cash and loads of smart people: it's just stuff they can do. So they do it.
(Via Tyler Cowen)