On October 13, 2010, The Globe and Mail reported that Google is using the information from its search engine as economic indicators. Entitled “Google’s Price Index to Measure Inflation of Online Sales,” the article explains that Google is using its enormous database to start a “Google price index” in real time.
This price index would be constructed from tracking prices of purchases made over the Internet. Items frequently purchased online include “cameras, baby toys, and watches,” notes the article. Because the data is electronically collected, the price index can be made available almost instantaneously. In contrast, official price index information from statistical agencies lags by several weeks. For example, Statistics Canada releases its consumer price index for October in the third week of November. Statistics Canada compiles its information by using data of 80 shoppers visiting various stores.
Google’s chief economist, Hal Varian, notes that deflation is a clear trend in the United States based on Google’s price index. In contrast, the official annual inflation rate in the United States in September was +1.14%.

Required:
Evaluate the merits of the Google price index by applying concepts from the IFRS Conceptual Framework.