Volume 1: Consumer Price Indices

Germany 2

Official title

Preisindex für die Lebenshaltung aller Arbeitnehmerhaushalte (Consumer Price Index for all employee households).

Scope

The index is computed monthly and relates to all employee households in the five new Laender and Berlin (East).

Official base

1989 = 100.

Source of weights

The weights and selected items were derived from a household expenditure survey conducted in the five new Laender and Berlin (East). Data were collected each month from January to December 1989 from a representative sample of 2,600 households. The average family size was 2.87 persons.

Weights and composition

Major groups Number of items Weights Approximate number of price quotations
Food and tobacco 187385.919000
Clothing and footwear 79134.110000
Rent, fuel and light 3055.18000
Furniture, household appliances and operation 138119.115000
Health and personal care 4729.77000
Transport and communications 68124.07500
Education, entertainment, leisure (excl. services of hotel and restaurant) 14590.411500
Personal goods and services of the lodging trade and other goods 4461.74000
Total 7381000.082000

Note: For non-centrally covered positions, the following numbers of price quotations are generally collected per priced item: in cities of up to 20,000 inhabitants: 4; in cities of 20,000 to 100,000 inhabitants: 6; in cities of more than 100,000 inhabitants: 8. Exceptions are: rents: per housing society selected and regulated (uniform) prices: 1 price quotation.

Household consumption expenditure

For deriving the weights, expenditure for the payment of goods, services, contributions to property insurance and motor vehicle taxes of private households were recorded.

Money expenditure does not include contributions to old-age and social insurance. Health expenditure is included only in so far as costs were incurred by private persons. The major part of the costs (visits to the doctor, stays in hospital, prescribed pharmaceuticals and other applications and appliances) is borne by the public health insurance and therefore not taken into account in the weighting scheme. Income tax and other direct taxes were not treated as money expenditure, except for the motor vehicle tax which is included in the weighting scheme. Income in kind, money transfers, donations, contributions and similar payments were excluded. For credit purchases and the hire purchase of commodities, the full purchase price at the time of purchase was recorded. Sales and purchases of used goods are included, but not shown as separate positions in the index. Administrative fees, property insurance contributions are included (household - house and content - and other property insurances, motor insurance).

Method of data collection

A representative sample of 80 survey communities or cities was selected. The reporting units, where the prices are collected directly, are selected in the survey communities by the relevant staff on the basis of turnover size.

Prices are recorded around the middle of each month, by investigators, directly at the reporting units. For some goods (e.g. electricity, gas, water), the written price lists of the enterprises are used, and rents of dwellings are covered by means of questionnaires. Officially-fixed uniform tariffs (passenger transport by rail, postal tariffs) are collected centrally on the basis of the tariff lists. The current regular prices and the comparable prices for the preceding month are collected by the investigators at the reporting units. Individual prices are then grossed up to average prices for communities (simple arithmetic means of the prices for the respective month and of comparable prices for the previous month). Discount and sale prices are not recorded. Black-market prices, hire-purchase and credit terms are not collected.

Housing

Rent quotations are obtained for six types of dwellings. Data are collected non-centrally at monthly intervals by means of special survey questionnaires; they are included in the index calculation as average prices and price relatives. Owner-occupied dwellings and houses are not covered as yet.

Specification of varieties

The descriptions of the items to be priced are relatively general. The quality and unit of measurement are indicated, but not the brand.

The price collector selects the specific commodities according to their turnover size in co-operation with the reporting unit.

Substitution, quality change, etc.

If there is a quality change, the comparable price for the previous month is recorded and a base price adjustment is made using the quotient of the current price and the price for the previous month. If a covered item or quality disappears, a new one is selected and the quality change is then assessed as compared with the former priced item; on the basis of this evaluation, a comparable price is calculated for the new item or quality for the previous month.

Seasonal items

Seasonal items are covered in the same way as all other priced items, and included in the monthly index computation without adjustment.

Computation

The index is computed according to the Laspeyres formula as a weighted arithmetic average with fixed base, using weights corresponding to the base period.

The simple arithmetic mean is used up to the calculation of the Land average prices and the Land price relatives. To compute average prices and price relatives for the territory of the five new Laender as a whole, the Land average prices and Land price relatives are weighted according to the population of each Land. Annual averages for the main index and the major index groups are computed using the simple arithmetic mean of the monthly indices.

Other information

Indices are published for major groups, along with indices for other types of households. It is intended to publish indices according to the procedure followed in the Federal Republic (territory prior to 3 October 1990) beginning with the second half of 1991. An index revision will probably be made with the introduction of a new (all-German) base year (1991).

A new series (base July 1990-June 1991 = 100) is now computed but the relevant methodological information series was not available in the ILO at the time the present volume was published.

Organisation and publication

The index is computed by the Federal Statistical Office, Branch Office, Berlin, Alexanderplatz, and published by Statistisches Bundesamt: Eilbericht und Monatsbericht der Fachserie 17, Reihe 7, Preise und Preisindizes für die Lebenshaltung (Wiesbaden).