Online prices and inflation during the nationwide COVID-19 quarantine period: Evidence from 107 Chinese websites

•We combine online prices from 107 websites in China and the difference-in-differences (DiD) method to analyze the impacts of the COVID-19 pandemic on price stickiness and inflation during the nationwide quarantine period.•We find that the COVID-19 pandemic leads to a 0.4% surge in the inflation rate, a 20% decrease in the price change probability, and a 1% decline in the size of absolute price changes.•We document that the pandemic had heterogeneous impacts on different sectors, leading to significant structural changes in inflation, which calls for different policies to alleviate the damage.•Whether products could be consumed while customers stayed at home was an important factor affecting price adjustment and price fluctuations, including purely online products, online-to-offline (O2O) products and pure offline products. Given the lack of activity in China's offline economy during the COVID-19 quarantine period, online prices provide new insights for analyzing the impacts of the pandemic on the economy. Using online prices from 107 websites in China and the DiD method to remove the Spring Festival effect, we show that the pandemic leads to a 0.4% surge in the overall inflation rate, a 20% decrease in the price change probability, and a 1% decline in the size of absolute price changes. Moreover, the pandemic had heterogeneous impacts on different sectors, leading to significant structural changes in inflation. Specifically, the pandemic hindered the price correction behavior after Spring Festival, and whether products could be consumed while customers stayed at home was an important factor affecting price adjustment and inflation dynamics.