Harmonised Index of Consumer Prices
What does the indicator describe?
In addition to the Consumer Price Index for Germany (CPI) and the Retail Prices Index, the Federal Statistical Office has calculated for European purposes a Harmonised Index of Consumer Prices (HICP) for Germany since 1997. For the HICP, time series from January 1995 are available. The HICP is used to measure inflation in the context of international, mostly inner-European comparisons. Its calculation, which relies on harmonised concepts, methods and procedures, reflects the development of prices in the individual states based on national consumption patterns. The HICP serves, among other things, to measure the convergence criterion of "price stability" as a basis for judging whether a Member State can participate in European economic and monetary union.
The HICP is calculated for the Member States of the European Union (EU), Norway, Iceland and Switzerland. It is used to form aggregates for the euro zone (Monetary Union Index of Consumer Prices - MUICP), for the EU (European Index of Consumer Prices - EICP), and for the European Economic Area (European Economic Area Index of Consumer Prices - EEAICP). The European Central Bank makes use of the MUICP in the context of its monetary policy to judge price stability within the euro zone.How is the Harmonised Index of Consumer Prices calculated?
The methodology for calculating the HICP has been laid down in various regulations of the European Commission and in supplementary guidelines. Like the CPI for Germany, this index is based on the international "Classification of Individual Consumption by Purpose" (COICOP), and it is largely derived from the CPI for Germany. In particular, the prices collected for the German CPI are also used to calculate the German HICP.
Like the German CPI, the HICP measures only pure price changes. This is ensured by determining and comparing the prices for a bundle of consumer goods and services which changes neither in quantitative nor in qualitative terms over time. Therefore, the consumption structure and all other factors which have an impact on the prices (e.g. unit of quantity, distribution channels, terms of delivery and payment) are kept unchanged in the calculations. If one of the variables changes, the difference between the new and the former price may include a non-genuine price change which will subsequently be eliminated by means of various quality adjustment procedures. The HICP is a Laspeyres price index which, in formal terms, is calculated as a chain index. Since 2012, the weights of the index have been updated annually in Germany (in contrast to the CPI) by means of existing national accounts data of the year before last (that means, of 2010) and price-updated in line with the December prices of the previous year. The current weights are based on the consumption structure of the year 2005. They were implemented with the index for January 2008. In this regard, the HICP and the CPI differ from each other as the CPI has been recalculated back to January 2005 and thus contains the consumption structures for 2005 from January 2005.
The difference in coverage between the German CPI and the German HICP consists mainly in the additional inclusion of owner-occupied residential property in the German CPI . Since 2003, however, studies have been carried out to examine a possible inclusion of proprietors' expenditure in accordance with the net purchase concept in the HICP. Furthermore, in contrast to the CPI for Germany the HICP for Germany does not include games of chance. Up to December 2009 also motor vehicle tax and registration charge were not included in the HICP for Germany.
For detailed information on price collection and calculation of the weighting pattern please refer to the information on the CPI in Germany.When and where is the Harmonised Index of Consumer Prices published?
Like for the CPI for Germany, a provisional and a final result are released for the German HICP. While the publication of the preliminary result takes place two working days before the end of the reference month at the latest, the final result for the German HICP is released around the middle of the subsequent month. The press releases and the detailed release calendar are available on the web site of the Federal Statistical Office. Eurostat, too, publishes the European aggregates around the middle of the month. How accurate is the Harmonised Index of Consumer Prices?
The HICP for Germany reflects the price changes in the households' consumption expenditure in the economic territory in a very reliable manner. The deviation between the preliminary and the final esults is usually not more than 0.1 percentage points.
Further information
Consumer prices
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