Regional Consumer Price Differences Within Germany Information Demand, Data Supply and the Role of the Consumer Price Index

Every month the Consumer Price Index for Germany (CPI) provides comprehensive and detailed information regarding the price development over time. However, when differences in the price level across regions in Germany have to be analysed at a given point in time, sufficient information is not available at present. Interest in regional consumer price data is shown by both scientists and policy makers. Currently, this information demand is not met as regional consumer prices or regional price comparisons are not provided by the Federal Statistical Office in Germany. Data available from the German Consumer Price Index is suitable to follow the price development over time but cannot be used directly to compare price levels of different regions because the goods tracked may be different from region to region. The article first considers the information demand and gives an overview of existing price data. Its main part refers to an empirical study which was conducted to check if existing Consumer Price Index data can be used to calculate regional consumer price comparisons by ex-post selecting comparable products.