Prices

The main function of price statistics is to measure the price development over time for the major product markets of the German national economy. Spatial price comparisons are limited to calculating the purchasing power of the euro abroad and to calculating place-to-place index numbers for cost-of-living allowances for the remuneration of public officials abroad.
 
Price indices are part of the major short-term economic indicators. They are the basis for many decisions to be taken in terms of economic and monetary policies and, in addition, they are used to inform the general public about inflation. For many market participants, they play an important role in shaping and checking commercial and private contracts, such as for the indexation of agreed payments (stable-value clauses).
 
To be able to statistically monitor and show the price trends on various markets, there is a nearly all-encompassing system of price indices in Germany.
 
At the production stage, that system includes especially the indices of producer prices of agricultural and forestry products, for industrial products, individual business services (for example, the index of sea freight rates) and price indices for buildings and other structures. The information required for calculation is generally obtained by asking directly the producers of the relevant goods and services.
 
At the trading stage, both the index of wholesale prices and the index of retail prices are calculated. The price development for goods imported from abroad and for goods exported from Germany are shown by the indices of import and export prices.
 
The consumer price index (in the past: consumer price index for all households) is probably the most important and best known component of the system of price statistics. It measures the average price change for all goods and services purchased or consumed by households for consumption purposes. The consumer price index is generally used as a yardstick of inflation.
 
Generally, all these indices are based on the same methodical principles. What is important when assessing the price level is mainly the type and quality of the good or service concerned, the trading stage (sale by producer, wholesaler or retailer), the delivery terms (ex-works, free buyer’s address, etc.) the marketplace or scope, the amount purchased (quantity discount) and the terms of payment. If for a good or service those variables change from one point in time to another, the absolute prices are no longer comparable. To show the genuine price changes, relatives are calculated (price in the base year = 100), in which all price changes are eliminated that are due to quality changes and the like. Combining the relatives for a specific area (for example, the products sold by the industry) and giving them weights according to the individual goods’ importance in terms of turnover or expenditure, a price index can be calculated as a weighted average of the individual relatives. All official price indices are Laspeyres (i.e. fixed base) indices with weights being adjusted regularly (about every 5 years).
 
Results of price statistics in a detailed breakdown are regularly published as downloads or in printed form (Fachserie 17) through our publication service.
 
For further questions please use our contact form.