Inflation? Or Deflation? Serious Shoppers Need To Know
Are You A Serious Shopper?
If you're a serious shopper looking for the latest and greatest discounts you need to know not only where to look for products, but when.
Prices change constantly, up sometimes, and down sometimes. But what are they now and what is the overall trend? Are they consistently moving up, or down?
What Data Should I Use?
Governments and private organizations are providing data on inflation and deflation all the time. Most of this data is year over year, or month over month. It's all good data ( so they say ) but how does year over year data help you when you are deciding what and whether to buy a product today?
Shoppers Need Timely Data
A serious shopper wants to know what is happening to prices right now, or at least in the last week or so. If prices have been going down recently then the time to buy may be right now. The best time to buy is when the price bottoms out before going back up again. Annual data won't tell you that, and government data will certainly not show you what is going on with the particular products that you can actually buy right now.
Our Data Shows You What Is Happening Now
Our data is short term, very recent data for the products that we carry in our on-line catalog. Here is a graph of that data. We'll explain below what it all means.
What Does This Squiggly Data Say?
The chart is divided into two sections, the INFLATION ZONE (red) on the top and the DEFLATION ZONE (blue) at the bottom. We check the price trend every 8 hours and create a data point that indicates the overall inflation or deflation of prices for that period. We average those 3 points to calculate the daily price point. A blue line indicates that prices are going down and are plotted in the DEFLATION ZONE. If the line goes red that indicates that prices are going up and the data point fell in the INFLATION ZONE, an indication that overall prices went up for that period.
Prices change constantly ( usually with changes made by AI robots ) but at certain times, such as the end of the work week or the end of the month prices can change abruptly as many merchants upload their latest list of sales, and put items on their clearance list. Special shopping seasons such as seasonal items and holiday items show significant price volatility as merchants race to find the best prices to stimulate sales.
At the time of this writing in early May 2016 we only have data for a few months, about 7000 items. As time moves forward and we increase our product catalog to about 20,000 items, the chart should get very interesting.
Sum More Interesting Data
If we calculate the sum of the daily inflation/deflation data, over time, and plot it we can see the cumulative inflation/deflation. This provides the overall cumulative effect of the changing prices for the period of time in our data sample.
A Note Regarding Precision
We use a sliding time domain window in our calculations. As the data marches through the window the results are smeared a bit over time. This is deliberate. We are not trying to provide pinpoint data to many digits of precision. Real world data, like predicting the weather, does not lend itself to that level of precision. Pretending it does is misleading. Many government agency reports state inflation, money supply, unemployment, etc, with highly precise numbers, and then a month or so later adjust it by several percentage points. That reported level of precision is ridiculous.
Subtle Changes That Create Inflation
When the price of items increase that creates inflation, it takes more $dollars$ to buy the same thing. There are, however, other more subtle changes that also increase prices and one of those is the removal of products that were discounted. When a large number of items go on sale or are priced for clearance that creates price deflation, the average price of our cataloged items goes down. When those items that were on sale return to their list price then that inflates the average price. More importantly when items that were on clearance (which typically have the largest discounts) are sold out ( or the warehouse tosses the few remaining items in the dumpster ) that can have a dramatic effect on the overall inflation since those items with the greatest discounts suddenly disappear from the marketplace. Inflation and Deflation are impacted more than by rising and falling prices but also by the overall mix of items in the marketplace, some of which are discounted, and some that are not.
Specific Product Price History
The charts on this page show the overall price trend for all our catalog items, but we also show the price trends for specific products as described in this post: How Do We Calculate Your Discounts
