Regional price indices in Switzerland : which methods could be used in Germany?

Abstract

"Differences in the prices of consumer goods and services are not thoroughly accounted for in either Germany or Switzerland. This study demonstrates the methodological difficulties associated with comparing contrasting price levels. It also describes current limitations of data records in Switzerland. Regional price indices are already calculated and published for three regions in Switzerland. Experience shows that regional price indices can be calculated with the assistance of minor adjustments and data supplements. Different prices for identical goods can arise in a market economy in the middle and long-run when these goods cannot be transported - or only at a great cost. For Switzerland, regional price differences for apartment rents, transport services, fuel, food, and beverages have all been empirically proven. The following issues must be clarified before an interregional price level comparison can be undertaken in Switzerland:<br> - For the purposes of an interregional comparison, the presently defined regional boundaries for the collection of data must be redefined. Additionally, the number of regions and conducted price surveys should be increased.<br> - The selection of goods included in the price indices must be precisely specified, for any meaningful interregional price level comparison requires a strictly uniform definition. Moreover, stringent quality control is required to ensure that surveyed goods are exactly those included in the index definition.<br> - For several services (for example, public transport, recreational pursuits, and cultural activities), differences in quality across regions must be accounted for.<br> - Regional price level differences are determined by the considerably regional differences in housing costs; however, one must also consider the vast differences in the quality of housing across regions. This issue could be resolved in Switzerland by, for example, the use of a hedonic model." (Authors' abstract, IAB-Doku) ((en))

Cite article

Oesch, T. & Schärrer, M. (2010): Regionale Preisindizes in der Schweiz. Welche Verfahren lassen sich auf Deutschland übertragen? In: J. Möller, E. Hohmann & D. Huschka (Hrsg.) (2010): Der weiße Fleck - zur Konzeption und Machbarkeit regionaler Preisindizes (IAB-Bibliothek, 324), p. 303-314.