5.4 Summary

Chart 5-10: Clustering in the prices of Ralph Lauren clothing

Source: Aparicio (2018).

Quantum pricing represents a challenge for official statistics, because the clustering in prices raises representativeness

issues. In small samples, the distribution of prices by categories cannot be confirmed, and thus a much larger sample size than the traditionally applied size is needed to ensure proper representativeness. Furthermore, it also arises, both in statistical and analytical terms, that upon repricing, when the typical categories of the shops are known, price changes in the future will become much more predictable, since the repricing will take place by reallocation from one price category to another one. As a result of this, looking ahead, the standard deviation of inflation may decrease, while its persistence rises, which is advantageous in terms of statistics and forecasting.

The surrounding world is continuously changing, at an ever increasing pace. Megatrends, such as digitalisation, technological progress and automation have a significant impact on the functioning of the global economy and on our everyday

life, to which we need to adapt day by day. In the age of digitalisation and internet, the traditional functioning of the market changes and the interrelation of economic agents also undergoes a transformation.

The exponential growth of the digital world and the huge volume of data thus generated are now leading to a data

revolution. This data revolution accelerates the growth and generation of the volume of data; extends the range of phenomena that can be analysed and presented by data; facilitates increasingly faster availability of data; expands the range of data sources and increases the number of data producers, processors and analysts. These changes encourage statistical offices to modernise traditional measurement methods and integrate the secondary data source represented by big data as much as possible. Digitalisation and the age of information also entail measurement difficulties, which was addressed in more detail in Section 3 of the 2017 Growth Report.

The impacts of big data and the data revolution mostly affect products and services connected to digitalisation. The impact of digitalisation filters down to prices through four main channels, i.e. e-commerce; more conscious, better informed consumers; automation, and IT development (ICT tools). The result of these points to lower inflation. Quantum pricing, as a new pricing strategy, also represents a challenge for official statistics, which primarily raises issues of representativeness and the predictability of price changes. On the whole, the trends of the 21 st century require economic agents to adjust properly and see new challenges as an opportunity rather than as an obstacle.

References:

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