1. bookVolume 38 (2022): Issue 1 (March 2022)
    Special Issue on Price Indices in Official Statistics
Journal Details
First Published
01 Oct 2013
Publication timeframe
4 times per year
access type Open Access

Using Scanner Data for Computing Consumer Spatial Price Indexes at Regional Level: An Empirical Application for Grocery Products in Italy

Published Online: 29 Mar 2022
Volume & Issue: Volume 38 (2022) - Issue 1 (March 2022)<br/>Special Issue on Price Indices in Official Statistics
Page range: 23 - 56
Received: 01 Aug 2020
Accepted: 01 Aug 2021
Journal Details
First Published
01 Oct 2013
Publication timeframe
4 times per year

The importance of constructing sub-national spatial price indexes (SPIs) has been acknowledged in the literature for over two decades. However, systematic attempts to compile sub-national SPIs on a regular basis have been hampered by the labour-intensive analyses required for processing traditional price data. In the case of household consumption expenditures, the increasing availability of big data may change the current approach for estimating sub-national SPIs by considering the use of weighted index formulae. The aim of this paper is twofold: firstly, to review previous literature on sub-national SPIs and secondly to estimate Italian consumer SPIs. To this aim we use scanner data referring to grocery products sold in a random sample of approximately 1,800 Italian outlets belonging to the most important retail chains and including information on prices, quantities and quality characteristics of products at barcode level. Various weighted index formulas are used for calculating consumer SPIs at detailed territorial level and at the lowest aggregation level. Our results show an interesting territorial variability of consumer prices of products sold in large-scale retail outlets across the Italian regions. Overall, the Southern regions appear to have price levels below the national average both for food and non-food products with some interesting exceptions.


Ackland, R., S. Dowrick, S., and B. Freyens. 2013. “Measuring global poverty: Why PPP methods matter”. Review of Economics and Statistics, 95(3): 813–824. Available at: https://www.jstor.org/stable/43554796 (accessed February 2020).10.1162/REST_a_00294 Search in Google Scholar

Alberola, E., and J.M. Marqués. 2001. “On the evolution of relative prices and its nature at the regional level: The case of Spain”. Journal of Regional Science, 41(3): 451–474. DOI: https://doi.org/10.1111/0022-4146.00226.10.1111/0022-4146.00226 Search in Google Scholar

Aten, B.H. 1999. “Cities in Brazil: An inter-area price comparison”. In International and inter-area comparisons of income, output, and prices, edited by A. Heston and R.E. Lipsey, 211–229. Chicago: University of Chicago Press. Search in Google Scholar

Aten, B.H. 2006. “Inter-area rice levels: An experimental methodology”. Monthly Labor Review, 129(9): 47–61. Available at: https://www.jstor.org/stable/23805663. Search in Google Scholar

Aten, B. 2008. Estimates of state and metropolitan price parities for consumption goods and services in the United States, 2005. Bureau of Economic Analysis. Available at: https://bea.gov/papers (accessed February 2020). Search in Google Scholar

Aten, B.H. 2017. “Regional price parities and real regional income for the United States”. Social Indicators Research, 131(1): 123–143. DOI: https://doi.org/10.1007/s11205-015-1216-y.10.1007/s11205-015-1216-y Search in Google Scholar

Aten, B.H., E.B. Figueroa, and T.M. Martin. 2012. “Regional price parities for states and metropolitan areas, 2006–2010.” Survey of Current Business, 92(8): 229–242. Available at: https://apps.bea.gov/scb/index.htm (accessed February 2020). Search in Google Scholar

Aten, B.H., Figueroa, E.B., and B.M. Vengelen. 2015. Real personal income and regional price parities for states and metropolitan areas, 2008–2012. Available at: https://apps.bea.gov/scb/pdf/2014/06%20June/0614_real_personal_income_and%20_regional_price_parities_for_states_and%20metrpolitan_areas.pdf. Search in Google Scholar

Aten, B., and T. Menezes. 2002. “Poverty price levels: an application to Brazilian metropolitan areas”. In World Bank ICP Conference, March, Washington, D.C.: 11–15. Available at: https://www.rug.nl/ggdc/productivity/pwt/related-research-papers/batatwb.pdf. Search in Google Scholar

Balk, B.M. 2008. Price and Quantity Index Numbers. Cambridge Books.10.1017/CBO9780511720758 Search in Google Scholar

Balk, B.M. 2009. “Aggregation Methods in International Comparisons: An Evaluation.” In Purchasing Power Parities of Currencies: Recent Advances in Methods and Applications, edited by D.S. Prasada Rao: 59–85. Cheltenham, U.K.: Edward Elgar. Search in Google Scholar

Bernardini A., M.C. Casciano, C. de Vitiis, A. Guandalini, F. Inglese, G. Seri, M.D. Terribili, and F. Tiero. 2019. “Re-design project of the Istat consumer price survey: use of probability samples of scanner data for the calculus of price indices”. Rivista di Statistica Ufficiale, 2–3: 67–14. Available at: https://www.istat.it/it/files//2021/03/RSU_2-3_2019_Article-3.pdf (accessed February 2020). Search in Google Scholar

Biggeri, L., T. Laureti, and F. Polidoro. 2017 “Computing sub-national PPPs with CPI data: an empirical analysis on Italian data using country product dummy models”. Social Indicators Research, 131(1): 93–121. DOI: https://doi.org/10.1007/s11205-015-1217-x.10.1007/s11205-015-1217-x Search in Google Scholar

Blien, U., H. Gartner, H. Stüber, and K. Wolf. 2009. “Regional price levels and the agglomeration wage differential in western Germany”. The Annals of Regional Science, 43(1): 71–88. DOI: https://doi.org/10.1007/s00168-007-0205-8.10.1007/s00168-007-0205-8 Search in Google Scholar

Čadil, J., P. Mazouch, M. Musil, and J. Kramulová. 2014. “True regional purchasing power: Evidence from the Czech Republic”. Post-Communist Economies, 26(2): 241–256. DOI: https://doi.org/10.1080/14631377.2014.904109.10.1080/14631377.2014.904109 Search in Google Scholar

Cannari, L., and G. Iuzzolino. 2009. Le differenze nel livello dei prezzi al consumo tra Nord e Sud. Questioni di Economia e Finanza, Bank of Italy, Rome Available at: https://www.bancaditalia.it/pubblicazioni/qef/2009-0049/index.html (accessed February 2020). Search in Google Scholar

Cavallo, A., W.E. Diewert, R.C. Feenstra, R. Inklaar, and M.P. Timmer. 2018. “Using Online Prices for Measuring Real Consumption across Countries”, AEA Papers and Proceedings, vol 108: 483–487. DOI: https://doi.org/10.1257/pandp.20181037.10.1257/pandp.20181037 Search in Google Scholar

Chessa, A.G., and R. Griffioen. 2019. “Comparing Price Indexes of Clothing and Footwear for Scanner Data and Web Scraped Data”. Economie et Statistique, 509(1): 49–68. DOI: https://doi.org/10.24187/ecostat.2019.509.1984.10.24187/ecostat.2019.509.1984 Search in Google Scholar

Coondoo, D., A. Majumder, and R. Ray. 2004. “A method of calculating regional consumer price differentials with illustrative evidence from India”. Review of Income and Wealth, 50(1): 51–68. DOI: https://doi.org/10.1111/j.0034-6586.2004.00111.x.10.1111/j.0034-6586.2004.00111.x Search in Google Scholar

Costa, A., J. Garcia, J.L. Raymond, and D. Sanchez-Serra. 2019. Subnational purchasing power of parity in OECD countries: Estimates based on the Balassa-Samuelson hypothesis. OECD Regional Development Working Papers 2019/12. DOI: https://doi.org/10.1787/3d8f5f51-en.10.1787/3d8f5f51-en Search in Google Scholar

Deaton, A., and O. Dupriez. 2011 Spatial price differences within large countries, Manuscript, Princeton University. Available at: https://www.princeton.edu/,deaton/downloads/spatial_price_differences_in_large_countries%20_10%20jul_2011_complete.pdf (accessed January 2020). Search in Google Scholar

Deaton, A., and A. Tarozzi. 2005 “Prices and poverty in India”, In The great Indian poverty debate, edited by A. Deaton and V. Kozel, New Delhi, Macmillan: 381–411, DOI: https://doi.org/10.1093/wbro/lki009.10.1093/wbro/lki009 Search in Google Scholar

De Carli, R. 2010. “Intra-national Price Level Differentials: The Italian experience”. In Price indexes in time and space: Methods and Practice, edited by L. Biggeri and G. Ferrari: 115–130. Berlin: Springer.10.1007/978-3-7908-2140-6_6 Search in Google Scholar

Diewert, W.E. 1976. “Exact and superlative index numbers”. Journal of econometrics, 4(2): 115–145. DOI: https://doi.org/10.1016/0304-4076(76)90009-9.10.1016/0304-4076(76)90009-9 Search in Google Scholar

Diewert, W.E. 2004. On the Stochastic Approach to Linking the Regions in the ICP. Department of Economics, University of British Columbia. Available at: http://papers.economics.ubc.ca/legacypapers/dp0416.pdf. Search in Google Scholar

Diewert, E. 2005. “Weighted country product dummy variable regressions and index number formulae”. Review of Income and Wealth, 51(4): 561–570. DOI: https://doi.org/10.1111/j.1475-4991.2005.00168.x.10.1111/j.1475-4991.2005.00168.x Search in Google Scholar

Eurostat. 2017. Practical Guide for Processing Supermarket Scanner Data, European Commission, Directorate C: National Accounts; prices and key indicators. Unit C-4: Price statistics; Purchasing power parities; Housing statistics. Luxemburg, Available at: https://circabc.europa.eu/sd/a/8e1333df-ca16-40fc-bc6a-1ce1be37247c/Practical-Guide-Supermarket-Scanner-Data-September-2017.pdf (accessed March 2020). Search in Google Scholar

Eurostat-OECD. 2012. Methodological manual on purchasing power parities. Luxembourg: Publications Office of the European Union, Available at: https://ec.europa.eu/eurostat/web/products-manuals-and-guidelines/-/KS-RA-12-023 (accessed January 2020). Search in Google Scholar

Feenstra, R.C., M. Xu, and A. Antoniades. 2017. What is the Price of Tea in China? Towards the Relative Cost of Living in Chinese and US Cities, National Bureau of Economic Research. No. w23161. Search in Google Scholar

Fenwick, D., and J. O’Donoghue. 2003. “Developing estimates of relative regional consumer price levels”. Economic Trends, 599: 72–83. Available at: https://webarc-hive.nationalarchives.gov.uk/ukgwa/20160120195958/http:/www.ons.gov.uk/ons/rel/cpi/regional-consumer-price-levels/developing-estimates-of-relative-regional-consumer-price-levels/developing-estimates-of-relative-regional-consumer-price-levels-.pdf (accessed January 2020). Search in Google Scholar

Geary, R.C. 1958. “A Note on the Comparison of Exchange Rates and Purchasing Power between Countries”, Journal of the Royal Statistical Society, Series A (General), 121(1): 97–99. DOI: https://doi.org/10.2307/2342991.10.2307/2342991 Search in Google Scholar

Hajargasht, G., and. D.S.P. Rao. 2010. “Stochastic Approach to Index Numbers for Multilateral Price Comparisons and their Standard Errors”, Review of Income and Wealth, Series 56: S32–S58. DOI: https://doi.org/10.1111/j.1475-4991.2010.00387.x.10.1111/j.1475-4991.2010.00387.x Search in Google Scholar

Hajargasht, G., R. Hill, S. Shankar, and D.S.P. Rao. 2017. “Spatial Chaining in International Comparisons of Prices and Real Incomes”, Mimeographed. Available at: https://thedocs.worldbank.org/en/doc/637701510177729968-0050022017/original/ICPTFPCC01DocSpatialchainingHilletal2017.pdf. Search in Google Scholar

Heravi, S., A. Heston, and M. Silver. 2003. “Using scanner data to estimate country price parities: A hedonic regression approach”. Review of Income and Wealth, 49(1): 1–21. DOI: https://doi.org/10.1111/1475-4991.00071 (accessed January 2020).10.1111/1475-4991.00071 Search in Google Scholar

Khamis, S.H., 1972 “A New System of Index Numbers for National and International Purposes”. Journal of the Royal Statistical Society, Series A, 135(1): 96–121. DOI: https://doi.org/10.2307/2345041.10.2307/2345041 Search in Google Scholar

Kocourek, A., J.Šimanová, and J.Šmída. 2016.37 “Estimation of regional price levels in the districts of the Czech Republic”. Statistika, 96(4): 56–70. Available at: https://www.czso.cz/documents/10180/32912820/32019716q4.pdf (accessed December 2019). Search in Google Scholar

Kokoski, M. 1991. “New Research on Interarea Consumer Price Differences”, Monthly Labor Review, 114(31). Available at: https://www.jstor.org/stable/41843608 (accessed December 2019). Search in Google Scholar

Kokoski, M., P. Cardiff, and B. Moulton. 1994. Interarea price indices for consumer goods and services: a hedonic approach using CPI data. U.S. Department of Labor, Bureau of Labor Statistics, Working Paper: 256. Search in Google Scholar

Kokoski, M., B. Moulton, and K. Zieschang. 1999 “Interarea Price Comparisons for Heterogenous Goods and Several Levels of Commodity Aggregation”, In International and Interarea Comparisons of Income, Output and Prices, edited by A. Heston and R. Lipsey: 123–166. University of Chicago Press. Search in Google Scholar

Istat. 2010. La differenza nel livello dei prezzi al consumo tra i capoluoghi delle regioni italiane, Anno 2009, Comunicato Stampa, Roma. Available at: https://www.istat.it/it/archivio/6279 (accessed September 2019). Search in Google Scholar

Istat. 2018a. Household consumption expenditure-Year 2017, Press release, Rome, Available at: https://www.istat.it/en/archive/consumption+expenditure (accessed January 2020). Search in Google Scholar

Istat. 2018b. Poverty in Italy-Year 2017, Press release, Rome, Available at: https://www.istat.it/en/archivio/217653 (accessed January 2020). Search in Google Scholar

Istat. 2020. Poverty in Italy-Year 2019, Press release, Rome, Available at: https://www.istat.it/en/archivio/246098 (accessed January 2020). Search in Google Scholar

Johnston, R., M. McKinney, and T. Stark. 1996. “Regional price level variations and real household incomes in the United Kingdom, 1979/80–1993”. Regional Studies, 306: 567–578. DOI: https://doi.org/10.1080/00343409612331349868.10.1080/00343409612331349868 Search in Google Scholar

Laureti, T., C, Ferrante, and B. Dramis. 2017. “Using scanner and CPI data to estimate Italian sub-national PPPs”, In Proceeding of Scientific Meeting of the Italian Statistical Society: Statistics and Data Science: new challenges, new generations, 28–30 June 2017, Firenze, Italy: 581–588. DOI: https://doi.org/10.36253/978-88-6453-521-0.10.36253/978-88-6453-521-0 Search in Google Scholar

Laureti, T., and F. Polidoro. 2017. “Testing the use of scanner data for computing sub-national Purchasing Power Parities in Italy”, In Proceeding of 61st ISI World Statistics Congress, 16–21 July 2017, Marrakech, Morocco. Available at: https://www.isi-web.org/publications/proceedings (accessed January 2020). Search in Google Scholar

Laureti, T., P.S.D. Rao. 2018. “Measuring Spatial Price Level Differences within a Country: Current Status and Future Developments”. Estudios de economía aplicada, 361: 119–148. DOI: https://doi.org/10.25115/eea.v36i1.2520.10.25115/eea.v36i1.2520 Search in Google Scholar

Léonard, I., P. Sillard, G. Varlet, and J.P. Zoyem. 2019. “Spatial differences in price levels between French regions and cities with scanner data”. Economie et Statistique, 5091: 69–82. DOI: https://doi.org/10.24187/ecostat.2019.509.1983.10.24187/ecostat.2019.509.1983 Search in Google Scholar

Majumder, A., R. Ray, and K. Sinha. 2012. “Calculating rural-urban food price differentials from unit values in household expenditure surveys: a comparison with existing methods and a new procedure.” American Journal of Agricultural Economics, 945: 1218–1235. DOI: https://doi.org/10.1093/ajae/aas064.10.1093/ajae/aas064 Search in Google Scholar

Majumder, A., R. Ray, and K. Sinha. 2015a. “Spatial comparisons of prices and expenditure in a heterogeneous country: Methodology with application to India”. Macroeconomic Dynamics, 195: 931. DOI: https://doi.org/10.1017/S1365100513000576.10.1017/S1365100513000576 Search in Google Scholar

Majumder, A., R. Ray, and K. Sinha. 2015b. “Estimating Purchasing Power Parities from Household Expenditure Data Using Complete Demand Systems with Application to Living Standards Comparison: India and Vietnam”. Review of income and wealth,612: 302–328. DOI: https://doi.org/10.1111/roiw.12073.10.1111/roiw.12073 Search in Google Scholar

Mehrhoff, J. 2019. “Introduction–The Value Chain of Scanner and Web Scraped Data”. Economie et Statistique, 5091: 5–11, DOI: https://doi.org/10.24187/ecostat.2019.509.1980.10.24187/ecostat.2019.509.1980 Search in Google Scholar

Menon, M., F. Perali, R. Ray, and N. Tommasi. 2019. The Tale of the Two Italies: Regional Price Parities Accounting for Differences in the Quality of Services, Working Paper Series Department of Economics University of Verona, No. 20/2019: 2036–4679 Available at: https://dse.univr.it/home/workingpapers/wp2019n20.pdf (accessed November 2019). Search in Google Scholar

Mishra, A., and R. Ray. 2014. “Spatial variation in prices and expenditure inequalities in Australia.” Economic Record, 90289: 137–159. DOI: https://doi.org/10.1111/1475-4932.12109.10.1111/1475-4932.12109 Search in Google Scholar

Montero J.M., T. Laureti, R. Mínguez, and G. Fernández-Avilés. 2019 “A Stochastic Model with Penalized Coefficients for Spatial Price Comparisons: An Application to Regional Price Indexes in Italy”, Review of Income and Wealth, 66(3): 512–533 DOI: https://doi.org/10.1111/roiw.12422.10.1111/roiw.12422 Search in Google Scholar

Musil, P., and J. Kramulová. 2019. Development of regional price levels in the Czech Republic.” In 22nd International Scientific Conference on Applications of Mathematics and Statistics in Economics AMSE 2019, 28 August–1 September 2019, Nižná, Slovakia: 30–38. Atlantis Press. DOI: https://doi.org/10.2991/amse-19.2019.4.10.2991/amse-19.2019.4 Search in Google Scholar

ONS. 2011. UK relative regional consumer price levels for goods and services for 2010, Office for National Statistics, UK: 1–15. Available at: https://webarchive.nationalarchives.gov.uk/20160108054525/http://www.ons.gov.uk/ons/rel/cpi/regional-consumer-price-levels/2010/index.html. Search in Google Scholar

Rao P.D.S. 2001. “Weighted EKS and generalised CPD methods for aggregation at basic heading level and above basic heading level”. In Joint World Bank-OECD seminar on Purchasing Power Parities, 30 January 2 February 2001, Washington D.C. Available at: https://www.oecd.org/sdd/prices-ppp/2424825.pdf. Search in Google Scholar

Rao P.D.S. 2004. The Country-Product-Dummy Method: A Stochastic Approach to the Computation of Purchasing Power Parities in the ICP”, Working Paper Series No. 03/2004, Centre for Efficiency and Productivity Analysis, School of Economics University of Queensland, Australia. Available at: https://economics.uq.edu.au/files/5343/WP032004.pdf (accessed November 2019). Search in Google Scholar

Rao P.D.S. 2009 “Generalised Elteto-koves-Szulc EKS and Country-Product-Dummy CPD Methods for International Comparisons” In Purchasing Power Parities: Recent Advances In Methods And Applications, edited by Prasada D.S. Rao: 86–120. Edward Elgar Publishing Company. Search in Google Scholar

Rao P.D.S., and G. Hajargasht. 2016. “Stochastic approach to computation of purchasing power parities in the International Comparison Program ICP”. Journal of Econometrics, 1912: 414–425. DOI: https://doi.org/10.1016/j.jeconom.2015. Search in Google Scholar

Rao P.D.S., and E.A. Selvanathan. 1992. “Computation of standard errors for Geary–Khamis parities and international prices: a stochastic approach”. Journal of Business and Economic Statistics, 101: 109–115. DOI: https://doi.org/10.2307/1391809.10.2307/1391809 Search in Google Scholar

Rokicki, B., and G.J. Hewings. 2019. “Regional price deflators in Poland: Evidence from NUTS-2 and NUTS-3 regions”. Spatial Economic Analysis, 141: 88–105. DOI: https://doi.org/10.1080/17421772.2018.1503705.10.1080/17421772.2018.1503705 Search in Google Scholar

Roos, M. 2006. “Regional price levels in Germany”. Applied Economics, 3813: 1553–1566. DOI: https://doi.org/10.1080/00036840500407207.10.1080/00036840500407207 Search in Google Scholar

Sherwood, M.K. 1975. “Family budgets and geographic differences in price levels”. Monthly Labour Review, 98: 8–15. Available at: https://www.jstor.org/stable/41839590 (accessed January 2020). Search in Google Scholar

Silver, M. 2003. “The Use of Weights in Hedonic Regressions: The Measurement of Quality-Adjusted Price Change,” In 7th Meeting of the U.N. International Working Group on Price Indexes Ottawa Group, INSEE, May 27–29, Paris: 175–212. Available at: https://www.ottawagroup.org/Ottawa/ottawagroup.nsf/51c9a3d36edfd0dfca256acb00118404/aee68df6fad39f4fca257272001959e9?OpenDocument (accessed January 2020). Search in Google Scholar

Tam, S.M., and F. Clarke. 2015. “Big data, official statistics and some initiatives by the Australian Bureau of Statistics”. International Statistical Review, 833: 436–448. DOI: https://doi.org/10.1111/insr.12105.10.1111/insr.12105 Search in Google Scholar

Waschka, A., W. Milne, J. Khoo, T. Quirey, and S, Zhao, S. 2003. “Comparing living costs in Australian capital cities. A progress report on developing experimental spatial price indexes for Australia”. 32nd Conference of Economists, 29th September – 1st October, Australian National University, Australian Bureau of Statistics. Available at: file:///C:/Users/laure/Downloads/Comparing_Living_Costs_in_Australian_Capital_ Citie.pdf (accessed January 2020). Search in Google Scholar

Weinand, S. 2020. Measuring Spatial Price Differentials: A Comparison of Stochastic Index Number Methods, Deutsche Bundesbank Discussion Paper No. 12/2020, Available at: https://ssrn.com/abstract=3581148. Search in Google Scholar

Weinand, S., and L. von Auer. 2020. “Anatomy of regional price differentials: evidence from micro-price data”. Spatial Economic Analysis: 1–28. DOI: https://doi.org/10.1080/17421772.2020.1729998.10.1080/17421772.2020.1729998 Search in Google Scholar

Wingfield, D., D. Fenwick, and K. Smith. 2005. “Relative regional consumer price levels in 2004”. Economic Trends ONS, UK, 615: 36–46. Available at: https://webarchive.-nationalarchives.gov.uk/ukgwa/20160105160709/http://www.ons.gov.uk/ons/rel/elmr/economic-trends–discontinued-/no–615–february-2005/relative-regional-consumer-price-levels-in-2004.pdf (accessed January 2020). Search in Google Scholar

World Bank. 2013. Measuring the Real Size of the World Economy: The Framework, Methodology, and Results of the International Comparison Program (ICP). The World Bank. Available at: https://openknowledge.worldbank.org/handle/10986/13329. Search in Google Scholar

World Bank. 2020. Purchasing Power Parities and the Real Size of the World Economies Results from the 2017 International Comparison Program, Washington D.C. Available at: https://openknowledge.worldbank.org/handle/10986/33623. Search in Google Scholar

Recommended articles from Trend MD

Plan your remote conference with Sciendo