How much can my money buy?
Reveal the presence of inflationary processes by examining price fluctuations.
Does the price index of a consumer basket vary in different regions?
Camera or cell-phone camera.
Why use data from multiple participants?
Using the GlobalLab community in order to have as many researchers as possible is essential to the success of this project. Our goal is to compare levels of inflation in different regions and find out whether a boost in prices is dependent on, or possibly even limited to, a region or whether prices are rising equally throughout the country (or the world).
To calculate the rate of inflation, it is necessary to perform several consecutive steps:
- Make a personal consumer basket. First, you must determine the composition of the consumer basket. For this, select consumer products that are classified as follows (you must choose one item in each category):
1. Bread (flour products)
2. Milk (dairy products)
3. Cereals and grains (rice, buckwheat)
5. Household goods (ie. soap, napkins, cleaning supplies).
Being consistent in the items you choose throughout the investigation is essential. We recommend that you choose a nearby store, one in which you typically make purchases. Do not choose shopping centers located far away because although you might start your research there, it may become inconvenient for you to complete it in the same place. You should choose- for the entire study period- to explore a specific product from each category (for example, bread from a certain bakery, the same amount of milk from a certain dairy or company, etc.). It is best to choose the products you are used to buying regularly for your home. If you always buy specific bread or milk these should be the products you will precisely price throughout the duration of the project. Not only must the brand of bread be consistent but also the volume of goods must remain fixed (same size/weight of bread loaf, same quantity of milk, etc.). The same guidelines apply to each of the categories.Since products from different manufacturers vary in price, the set of products in the consumer basket you compile should not change throughout the study. This will facilitate correct and consistent data collection for any price changes that occur.
Use the Collecting Data file from the Resources page. You can download and print the table from this file.
- Determine the prices of your studied products.
The period of study will last one month. Such a long period of research will allow you to track the change in prices for each product with high accuracy, giving you an idea of the overall development of price trends.To determine the price of the product you need to take a picture of a receipt or a price tag for each of the products on the first day of the study and then again on the last day of the study (after 30-31 days). If, on the day you begin your study and plan to fix the prices for the consumer basket, you discover there are temporary discounts for certain products in your consumer basket, you should use the price of the product before the start of the sale. Also indicate this on the price tag or your receipt.
- Prepare price data so you can fill out the Report Form.
Compile all the receipts or price tags on a sheet of paper and photograph them. If you did not collect receipts, but took pictures of the prices as you shopped, connect them in a single file using a graphics editor.
- Enter the collected data into the Report Form.
To fill out the Report Form you will need to:
1. List the products that make up your consumer basket.
2. Specify the beginning and end dates for your price fixing.
3. Calculate - based on your recorded data - the change in prices of individual products and the consumer basket as a whole. To do this, divide the fixed price of the product on the last day of study by the fixed price of the product on the first day of your study period. Repeat the calculation for each product category. For example, divide the price of bread from the last day of the study by the price of bread from the first day of the study.
Next, calculate the price change of your consumer basket. To do this, determine the mathematical mean of the product group. To calculate the mean, add up all the individual amounts obtained when calculating the price changes of individual products, and divide the result by the number of products.
4. Attach photographs to the Report Formillustrating your pricing data.
Briefly describe the observed change in the level of prices and compare them with the official data. http://www.bls.gov/cpi/