The Price is Right?: Statistical evaluation of a crowd-sourced market information system in Liberia

Many critical policy decisions depend upon reliable and up-to-date information on market prices. Such data are used to construct consumer price indices, measure inflation, detect food insecurity, and influence macroeconomic policy. In developing countries, where many of these problems are most acute, reliable market price information can be hard to come by. Here, we evaluate data from Premise, a new technology for measuring price information using crowd-sourced data contributed by local citizens. Our evaluation focuses on Liberia, a country with a history of economic and political instability. Using data from Premise, which recently began data collection in Liberia, we analyze tens of thousands of individual price observations collected at hundreds of different locations in Monrovia. We illustrate how these data can be used to construct composite market price indices, and compare these constructed indices and prices for individual products to "ground truth" data from the Central Bank of Liberia and the United Nations World Food Programme. Our results indicate that the crowd-sourced price data correlates well with traditional price indices. However, we find statistically and economically significant deviations from traditional measures that require deeper investigation. We conclude by discussing how indices based on Premise data can be further improved with simple supervised learning methods that use traditional low-frequency data to calibrate and cross-validate the high-frequency Premise-based indices.