Consumer price index

Is the consumer price index for Germany (CPI), on the basis of updated every 5 years the basket, the average percentage change in price of all goods and services in the private needs. Starting point in this approach is always the respective base year (currently 2010), in which the basket created. The change in price of the previous year results always from the comparison of the current overall development with that of the previous year.

The calculation in Germany is done using the Laspeyres index:

Current price * quantity consumed in the base year price in the base year * consumption amount in the base year

The starting point is the so-called cart that contains all the goods and services that are most commonly purchased by consumers currently. The choice of concrete products for the price observation is continuously determined in the form of representative samples and kept up to date. A total of 300,000 individual prices for these products are therefore calculated every month by 600 price collectors in 188 municipalities and central price surveys such as the Internet or mail order catalogs. Subsequently, the individual goods of the basket will be allocated approximately 700 groups of goods and calculates the average price development of each type of goods. As a basis for the classification into groups of goods the COICOP classification, as they are also used by Eurostat and the United Nations serves. The classification summarizes the categories of goods listed in three hierarchical levels to larger categories together, so as to provide an overview of the price development in different parts of the detailed private life. The top level of the hierarchy is a classification into the following twelve categories:

For the calculation of the overall rate of inflation the price developments of each product group are weighted by the so-called weighting scheme. This breakdown on how much households spend on average for one type of, ensuring that each group of goods flows only with its rightful share of expenditure in the overall price index. The weighting scheme is updated in contrast to the cart only in a 5 - year cycle in the context of income and expenditure survey. This drawing around 60,000 households on behalf of the Federal Statistical Office in each voluntarily for three months their total revenue and expenditure. This basic information will be supplemented by additional refining surveys to allow a detailed breakdown of expenditure by types of goods.

The prices in the consumer price index is as shown as percentage values ​​relative to a base year (currently 2010), which is rated at 100 points. The overall index was still so in 2011 at 110.7, in 1991 at 75.9. Individual product groups can develop very differently to this but. So, for example, increased 2000-2009 prices for the CC 02 category, Alcoholic beverages, tobacco products from 77.5 to 113.0 points, while the range 08 CC, messaging 106.6 dropped to 88.0 points.

This partly very different development of the various commodity groups is one of the reasons why the by many people perceived inflation often significantly differs from the inflation objective captured in the consumer price index. The Federal Statistical Office deals with the topic of perceived inflation in special investigations.

The determination of the consumer price index is made in Germany using a Laspeyres index. If increase the prices of different goods in different degrees, the index has a tendency to over- estimate of the true increase in the cost of living. This can be attributed to the fixed basket, because strongly increasingly expensive goods may be optionally substituted by other goods. For European purposes, the Federal Statistical Office calculated in addition to the consumer price index for Germany, since 1997, a harmonized index of consumer prices ( HICP) for Germany.