Purchasing power

As consumer purchasing power households that is available in households for consumption purposes income is called, so the amount that remains on income per household after all recurring payment obligations were served (for example, apartment rentals, mortgage payments, insurance premiums ). The purchasing power may have meant either the monthly income or even relate the annual income of a person or a household.

Terms

The purchasing power of a household did not depend solely on the employment situation of household members, but is also subject to significant regional differences. These differences are of great importance for the consumer goods industry, which must be adapted to the present in a particular region purchasing power their offers in order not to produce past the needs of the market.

The purchasing power theory is an approach in economic theory about the impact of wage increases.

The disposable income of private households is a particularly meaningful indicator is the ( monetary) " prosperity " of the population and should be understood as the amount available to the people living in a particular region for consumption or for savings available. The disposable income is derived from the received primary income after deduction of current transfers paid and after addition of the received current transfers. However, the disposable income should not be equated with the term " purchasing power " because purchasing power in addition to the nominal amount of money principle also should take into account the price level ( real wage ), while disposable income generally recorded as a pure nominal amount of money no price differences.

For retailers, in addition to the purchasing power and the centrality plays an important role. The centrality index is calculated from the ratio of the purchasing power index (purchasing power compared to the national average ) to sales ratio ( retail sales compared to the national average ).

Purchasing power index

Purchasing power index (also: purchasing power number or purchasing power index ) a region ( state, county, municipality, postal code field, and so on ) are the purchasing power, in this region per capita or household on compared to the national average. The national average case has the standard value of 100 If the purchasing power index per capita of a region, for example, 84 so it is below the average - the people in this region have then on average only about 84 percent of the average purchasing power. In addition to regions of a country, countries themselves regarding your purchasing power can be compared.

The calculation of purchasing power index is based primarily on wage and income statistics, ie data on the tax and on data related to government transfer payments ( unemployment benefits and family benefits, family allowances, pensions, etc.). It covers all income from employment and self- employment, income from rental and leasing, interest rate and capital income. Deduction side, taxes, insurance, savings plans and loan repayments are taken into account.