Federal Statistical Office of Germany (FSO)

Section Consumer Prices

Contact: verbraucherpreisindex@destatis.de

Gustav-Stresemann Ring 11
65189 Wiesbaden

GERMANY

The harmonised index of consumer prices (HICP) is a consumer price index (CPI) that is calculated according to a harmonised approach. It measures the change over time of the prices of consumer goods and services acquired by households (inflation).

Due to the common methodology, the HICPs of the countries and European aggregates can be directly compared.

European classification of individual consumption according to purpose (ECOICOP)

The HICP covers the final monetary consumption expenditure of the household sector.

The main statistical variables are price indices.

The basic unit of statistical observation are prices for consumer products.

3.6.1. Statistical target population

The target statistical universe is the 'household final monetary consumption expenditure' (HFMCE) on the economic territory of the country by both resident and non-resident households. The household sector to which the definition refers, includes all individuals or groups of individuals irrespective of, in particular, the type of area in which they live, their position in the income distribution and their nationality or residence status. These definitions follow the national accounts concepts in the European System of Accounts.

3.6.2. Coverage error population

The expenditure of individuals living in institutional households is not included in the weighting scheme of the HICP because it is excluded from the sample survey of income and expenditure, which is the main source for the weighting scheme. However, it can be assumed that this does not lead to structural distortions in the weighting scheme for the German HICP.

3.7.1. Geographical coverage

The HICP refers to the economic territory of a country as referred to in paragraph 2.05 of Annex A to ESA 2010, with the exception that the extraterritorial enclaves situated within the boundaries of a Member State or a country are included and the territorial enclaves situated in the rest of the world are excluded.

3.7.2. Coverage error regions

The price collection of the basket of goods and services is conducted in 94 regions in 16 Laender. No part of the country is excluded from the index.

3.8.1. Start of time series

The HICP series started in January 1997.

3.8.2. Start of time series - national specifics

See the HICP database

2015=100

The following units are used:

• Index point
• Percentage change on the same period of the previous year (rates);
• Percentage change on the previous period (rates);
• Percentage share of the total (weights).

HICP is a monthly statistics.

Harmonised Indices of Consumer Prices (HICPs) are harmonised inflation figures required under the Treaty on the Functioning of the European Union. Regulation (EU) 2016/792 of the European Parliament and the Council of 11 May 2016 (OJ L 135) sets the legal basis for establishing a harmonised methodology for the compilation of the HICP and the HICP-CT.

This regulation is implemented by Commission Regulation (EU) 2020/1148 of 31 July 2020.

Further documentation, can be found in Eurostat’s website - HICP dedicated section, namely recommendations on specific topics, under the methodology page, and guidelines, under the quality page.

At current state, there is no regular data sharing with international institutions.

Regulation (EC) No 223/2009 of the European Parliament and of the Council, of 11 March 2009, on the transmission of data subject to statistical confidentiality to the Statistical Office of the European Communities

At the finest level of detail only highly aggregated results are published.

In line with the Community legal framework and the European Statistics Code of Practice Eurostat disseminates European statistics on Eurostat's website (see point 10 - 'Accessibility and clarity') respecting professional independence and in an objective, professional and transparent manner in which all users are treated equitably. The detailed arrangements are governed by the Protocol on impartial access to Eurostat data for users.

The HICP is released according to Eurostat’s Release calendar.

The calendar is publically available and published at the end of the year for the full following year.

The annual release calendar is available at: www.destatis.de > Press > Annual release calendar

Results of the HICP are provided in press releases, in online publications and the Genesis-Online database, all of which can be accessed via the Federal Statistical Office's website.

Information about pre-access is published on the website of the FSO: www.destatis.de > Press > Press releases information for external users about statistical results

Monthly

The German HICP is disseminated using news releases for the flash estimate and for the final results and an online database. Additional information concerning the HICP in English are published at the FSO’s homepage: www.destatis.de > Themes > Economy > Prices

A press release for CPI and HICP is issued each time results are published. The press release is intended to communicate the most important results in a summarised form. The dates of publication are listed in an annual release calendar that is available publicly.

Major current results of the HICP for Germany are published on the consumer price index theme page at www.destatis.de > Themes > Economy > Prices > Consumer-Price-Index under ‘Tables’ (table 'Harmonised consumer price index'). HICPs for Germany as well as for the EU-Member states are available for free download (only in German) on www.destatis.de > Themen > Wirtschaft > Preise > Verbraucherpreisindex under 'Publikationen‘, see 'Harmonisierter Verbraucherpreisindex'.

The GENESIS-Online database (www.destatis.de > GENESIS-Online Database > 6 > 61 > 611 > 61121 > Tables) permits the results of the overall HICP and in a technical (subject-related) breakdown of 130 sub-indices to be directly retrieved in various file formats (.xls, .html and .csv) from 1996 (if available).

Due to the Federal Statistics Act, micro data can be used for scientific purposes, but only in an anonymised form and according to the general policy regarding confidentiality. If necessary, there are special analyses of micro data for academic or scientific research which are performed by staff at the Statistical Offices obliged to respect confidentiality.

The results of the HICP as well as results for the EU-Member states at a finer level of detail are available on the homepage of the Statistical office of the European Union (Eurostat).

The HICP Methodological Manual provides the reference methodology for the production of HICP. (https://ec.europa.eu/eurostat/web/products-manuals-and-guidelines/-/KS-GQ-17-015)

10.6.1. Documentation on methodology - national specifics

Methodological papers on the HICP are issued in the following publications:

• WiSta - Wirtschaft und Statistik journal: www.destatis.de > Methods > WISTA-Scientific Journal
• Explanatory notes on the statistics (only in German): www.destatis.de > Themen > Wirtschaft > Preise > Verbraucherpreisindex > in the 'Methods' section
• Methods (only in German): www.destatis.de > Themen > Wirtschaft > Preise > Verbraucherpreisindex > Methoden, see 'Methodenpapiere'

See Eurostat's Compliance Monitoring Reports of 2009, 2010 and 2015, and follow-up report of 2018 on Eurostat's web page: Quality - Harmonised Indices of Consumer Prices (HICP)

Quality reports are published at the homepage but currently only in German: www.destatis.de > Themen > Wirtschaft > Preise > Verbraucherpreisindex under 'Qualitätsberichte'

With its Statistical Quality Offensive, the Federal Statistical Office introduced a comprehensive quality management system based on Total Quality Management in 1999. The conceptual frame of that comprehensive quality management system is the EFQM Excellence Model of the European Foundation for Quality Management. Choosing the EFQM Excellence Model has created the basis for a lasting development process in which improvements are systematically implemented (i.e. planned and checked through measurement) in all relevant domains.

The legal requirements for data quality are specified in greater detail for statistical work in the European Statistics Code of Practice and the Quality Assurance Framework. The European Statistics Code of Practice as well as the Quality Assurance Framework serves as the basis for the Quality Manual of the Statistical Offices of the Federation and the Laender in Germany.

11.1.1. Quality management - Compliance Monitoring

 Compliance Monitoring

11.1.2. Quality assurance - national specifics

In 1999, a comprehensive quality management system based on Total Quality Management has been introduced at the FSO with the EFQM Excellence Model of the European Foundation for Quality Management as its conceptual frame.

Since then, numerous measures have been initiated as part of the Statistical Quality Offensive. This includes the development and definition of strategic goals (fit 2012, fit 2008, fit 2005), the annual planning cycle of the closed conference of the senior management including annual programme planning, agreements on targets (contracts), programme and resources planning, cost accounting, controlling and regular staff surveys.

To continue to guarantee and expand the quality level achieved, the Statistical Offices of the Federation and the Laender have developed and approved a quality manual. The Quality Manual has strong links to the existing basic documents at the European level. The quality guidelines are a consistent further development and elaboration of the Code of Practice and the Quality Assurance Framework.

Several hundred 'Quality Guidelines for the Statistical Production Process' are formulated which guide German official statistics in their daily work. The quality guidelines describe concrete procedures for all phases of the implementation of official statistics (e.g. data collection, preparation, dissemination) which serve to ensure the high quality of the statistical processes and products and whose implementation is binding for all statistics.

The HICP is compiled in accordance with both comprehensive provisions in the relevant legal bases and the European methodological guidelines and requirements. Differences to the national consumer price index are documented and explained to users. The delivery and publication dates for the German HICP are agreed before the start of each year.

A processing program is used for computation purposes for both the German HICP and the national CPI. It controls the individual process steps from price collection through to the calculation of results and carries out, and documents comprehensibly, (nearly) all calculations. Plausibility checks are built in each stage of processing to prevent data entry errors by issuing warnings if implausible data are entered. Critical data that have been entered by price collectors must be confirmed and/or be specified by specially trained staff of the statistical offices. Additionally, the processing program computes indicators as a basis for further quality checks. Among other things, the most peculiar results must be listed for each product type and be checked by appropriately trained staff of the statistical offices after the computation of the Laender results. Furthermore, specially trained staff of the Federal Statistical Office again compares the results of the various Laender. Data that differ considerably will be checked once more.

The working group on 'Price collection for consumer price statistics', which comprises representatives of the Federal Statistical Office and the statistical offices of the Laender, regularly analyses weaknesses in the process of statistical production and develops quality improvement methods.

Eurostat additionally carries out its own data checks for HICP purposes. It regularly requests reports on national computation practices and monitors compliance with European requirements during so-called Compliance Monitoring Visits. The results of such visits are published on the internet. Due to the common data basis, they are relevant to quality assurance activities in relation to the national CPI, too. In addition to an assessment of compliance with the requirements of EU regulations, the results comprise recommendations for improvement whose implementation is monitored by Eurostat.

11.2.1. Compliance monitoring - last report and main results

The last available compliance or follow-up report can be found on Eurostat's web page: Quality - Harmonised Indices of Consumer Prices (HICP).

11.2.2. Quality assessment - national specifics

The German HICP is characterised especially by its high relevance for inflation measurement, its comparability within the European Union, its accuracy and very good timeliness. Special importance is attached to the transparency of data collection and computation methods. Fulfilling the relevant requirements, the HICP serves as a central indicator of inflation trends in Germany and as a basis for international comparisons of inflation rates. The concepts and methods of the HICP are developed according to international standards and they rely on the experiences of all EU member states in the field of consumer price statistics. Improving the quality and the comparability of the HICP is a permanent process.

In addition to being a general measure of inflation, the HICP is also used in the areas of:

• wages, social benefit and contract indexation;
• economic forecasting and analysis;
• measuring specific price trends;
• accounting purposes and deflating other series;
• inflation targeting by central banks;
• cross-country economic comparisons.

The euro area (evolving composition) index is used by the European Central Bank (ECB) as the main indicator for monetary policy management. The ECB and the European Commission's Directorate-General for Economic and Financial Affairs (DG ECFIN) use the HICP for assessing price stability and price convergence required for entry into European Monetary Union.

Other users include: National Central Banks, financial institutions, economic analysts, the media and the public at large.

12.1.1. User Needs - national specifics

The HICP is used by various user groups especially for the following three purposes:

• Inflation measure;
• Convergence criteria;
• Indexation of financial instruments by using the HICP as a compensation benchmark.

However, there is only limited use as compensation benchmark at the national level of the HICP.

Typical and regular users of the HICP are the German government, especially the ministry of economic affairs and analysts in the banking or insurance sector.

There is a committee of experts on prices and wages, the so-called “Fachausschuss ‘Preise und Verdienste’”.

Expert committees commissioned by the Statistical Advisory Committee and other statistical working parties deal with specialist subjects. Discussions of expert committees can make it possible to tap the knowledge and the experience of external experts for the planning and development of official statistics. Users and respondents are given a chance to articulate their interests. At the same time, representatives of official statistics may explain their concerns and clarify the feasibility of proposals in discussions with the parties concerned.

At current state, there is no survey in place which relates to the satisfaction of users and HICP. Perhaps the only 'measure' of user satisfaction may be the amount of clicks and downloads which is regularly evaluated.

Regarding ECOICOP sub-indices, especially at 5-digit level, certain indices are not provided because they are not included in the coverage of the HICP, because they were excluded for conceptual reasons (e.g. life insurance), the degree of methodological harmonisation is not yet sufficient or because their consumption expenditure of the private household sector in Germany is very low. The same explanation holds for the HICP-CT.

As sampling is based on purposive selection, the sampling error cannot be formally calculated or estimated. To keep the unknown sampling error as low as possible, however, more than 300,000 individual prices are collected every month and a highly sophisticated stratification model is applied. Non-sampling errors are not quantified in HICP construction. Activities such as continuously improving the methodology and taking a wide range of quality assurance measures at different levels are however intended to reduce non-sampling errors to a minimum. An accuracy of 0.1 percentage points is sought for the overall HICP, while inaccuracies are larger at finer levels of detail regarding, in particular, the expenditure on products with a small importance for consumption.

The generally high accuracy of the HICP has also been confirmed by the relevant CPI analyses made during regular revisions where, in most cases, noteworthy revision differences have only been the result of methodological improvements. Mostly, changes in the CPI methodology are carried out in a corresponding manner in the HICP, too, though not at the same time. As methodological changes in the HICP are usually not accompanied by back-calculations, the discrepancies caused by changes in the methodology may be larger for the HICP than for the CPI in years of methodological change.

Discrepancies between provisional and final results have been small (a maximum of +/-0.1 percentage points to date).

Except for rents, constructing the HICP is not based on a random sample. A sampling frame is not available from which a random sample could be drawn either directly or with reasonable effort. Purposive selection, mostly in combination with the cut-off principle, is instead used in drawing the sample. For this reason, a sampling error cannot be formally calculated or estimated although there are sampling-related errors. To keep the unknown sampling error as low as possible, more than 300,000 individual prices are collected every month and a highly sophisticated stratification model is applied. It can be assumed that the monthly development of prices is reflected very accurately in both the overall index and aggregated sub-indices using this non-random procedure.

Non-sampling errors are not quantified in HICP construction. Continuously improving the methodology is however intended to reduce non-sampling errors to a minimum.

• Systematic errors due to deficiencies in the sampling frame: An individual sampling frame is not available. The sampling frame for the HICP is rather compiled from different sources. Gaps are closed by estimates.
  
  
• Errors because of non-response (units and variables/items): Compared to other surveys, non-response is very low because, typically, individuals or enterprises are not questioned or interviewed. Instead, prices are collected by specially trained price collectors. It may nonetheless happen that information is justifiably missing, for instance, because a survey unit is closed for holidays or an observation unit cannot be visited as it only operates on a seasonal basis or the product is temporary not available (out of stock or seasonal effect). Regarding such temporary phenomena, updating procedures are integrated in the processing program to prevent biases. The relevant automated calculations are initiated by specific code-based routines. In cases of permanent non-response (if, for instance, a unit ceases to operate or a product is no longer offered), the price collectors have to look for substitutes without delay.
  
  
• Compilation and processing errors: As the processing program incorporates consistency and plausibility checks, measurement or data entry errors are largely prevented in the process of data compilation. Inconsistent entries are rejected by the processing program. Owing to the incorporated plausibility checks, warning messages are displayed if, for instance, atypical price or quantity changes occur. If a warning message is ignored, the relevant case will be automatically shown to a specially qualified staff member of the competent statistical office for final assessment or clarification. Processing errors are prevented by automated routines or calculations of the processing program.
  
  
• Effects depending on the model used: Typically, the weights are kept constant over a relatively long period of time when applying the Laspeyres formula (fixed-base index). Although the structure of household expenditure changes slowly, however, it does so from year to year. To account for changes in the structure of household expenditure, the HICP weighting pattern is updated every year. In addition, methodological adjustments are implemented shortly after they have been decided. Unlike the CPI, the HICP is a Laspeyres chain index that does without recalculating data of preceding periods. In contrast to the national CPI, the HICP is therefore affected by changing consumption patterns and methodological changes.

The full set of HICPs is published each month according to Eurostat’s Release calendar, usually between 15 and 18 days after the end of the reference month.

Each year, the January release is published at the end of February to allow for the annual update of the weights, both of individual product groups and the relative country weights of Members States in the country group aggregates.

The euro area flash estimate is published on the last working day of the reference month or shortly after that.

Since the March 1997, launch of the HICP release, the HICP for the country groups aggregates has always been published on the dates announced in Eurostat’s Release calendar.

HICPs across Member States aim to be comparable. Any differences at all levels of detail should only reflect differences in price changes or expenditure patterns.

To this end, concepts and methods have been harmonised by means of legislation. HICPs that deviate from these concepts and methods are deemed comparable if they result in an index that is estimated to differ systematically by less than or equal to 0.1 percentage points on average over one year against the previous year (Article 4 of Council and Parliament Regulation (EU) 2016/792).

HICP comparability over time is ensured. Methodological changes or changes in the consumption and shopping habits are incorporated every year. Due to the fact that data are not recalculated for previous periods, however, the annual adjustments may lead to methodological breaks in the time series of sub-indices, which will limit HICP comparability over time. In individual cases, comparability can be achieved for specific purposes, provided the data required are in place.

In the series of the HICP-AP, there is a break in January 2015 which is due to the introduction of a new methodology of identifying administered prices (AP).

The new sample of rents was introduced from January 2015 to January 2017. This did not lead to a single break in a specific month since the introduction of the improved sample was an ongoing process. However, the implementation of the related weights for the different type of landlords and for the regions below the Laender level could lead to breaks in the series of the HICP.

To maintain comparability over time, the German HICP was revised in January 2019 from 2015 to 2018, due to the introduction of a new methodology for package holidays. Annual inflation rates in the months of 2015 are distorted due to the change in methodology. From January 2016 onwards, the annual inflation rates can be derived from indices compiled according to the same methodology.

Differences between the HICP and national CPI

In contrast to the German CPI, the HICP is constructed as a chain index with an annually changing weighting pattern. Typically, HICP figures of previous periods are not recalculated when reweighting the expenditure and incorporating methodological changes. However, the HICP takes into account more recent changes in consumption patterns.

Regarding the territorial and population coverage, there are no differences between CPI and HICP.

Unlike the CPI, the HICP does not include household final consumption expenditure on games of chance. Additionally, owner-occupied housing is not included in the HICP while in the CPI it is estimated using the rental equivalence approach. Further, crèche fees enter the German CPI in ECOICOP 10.1, while they are still part of ECOICOP 12.4 for the German HICP.

If a seasonal pattern cannot be rejected, CPI figures are not chained by linking to previous December values (as for the HICP), but to annual averages (of the new base year).

The HICPs are internally coherent. Higher level aggregations are derived from detailed indices according to well-defined procedures.

Not available

The HICP series, including back data, is revisable under the terms set in Articles 17-20 of Commission Implementing Regulation (EU) 2020/1148.

17.1.1. Data revision - policy - national specifics

HICP

Routine revisions: At the end of a reference month, the provisional HICP results are estimated on the basis of provisional Laender results available by that time. In the middle of the following month, the final HICP results will be published based on the complete range of final data in place.

Methodological revisions: A new weighting base is introduced every year 13 months after the end of the year to which the weights pertain. Where applicable, methodological changes can be incorporated in this context, too. The price base for the current reference year is December of the previous year. Together with the weighting base, the price base is adjusted every year. A new index base is introduced usually at ten-year intervals, and more precisely one month after the end of the reference years ending in 5.

The HICP results are usually neither recalculated for preceding periods nor revised; instead they are chain-linked to the data published previously. This also applies if more up-to-date weighting information is available.

CPI

Routine revisions: see above routine revisions of the HICP.

Methodological revisions: For the consumer price index, methodological revisions are conducted in the form of so called regular adaptations. At regular intervals (typically every five years), a new consumer price index is introduced with a new base year. Besides adapting the weighting pattern for goods and services to the current consumption habits of households and updating the Laender and outlet-type weights, the survey catalogue is systematically reviewed and methodological changes are made on that occasion.

The planned revision for 2018 was postponed to 2019. The newest revision was conducted in 2023.

As regards published HICP, there have been corrections in

• February and March 2015,
• January and April 2016,
• January and February 2019.

The revisions in 2015 were due to corrections for hospital services. The details were submitted to Eurostat at the time the revisions occurred.

In January 2019, the German HICP was revised from 2015 to 2018 according to a new methodology for package holidays. The seasonal pattern of the German indices for package holidays has changed due to a different statistical treatment of package holidays. In order to obtain undistorted annual inflation rates for 2019, back series of package holidays indices in the German HICP are revised.

As regards the HICP-CT, there have been several corrections, namely in:

• January 2010,
• May 2011,
• July 2011,
• September 2011,
• January until May 2011,
• September 2012,
• January to March 2015,
• June 2016,
• September and October 2016,
• January and February 2019.

The revisions in 2016 were due to corrections for international package holidays. The details were submitted to Eurostat at the time the revisions occurred.

As regards the HICP-AP, the composition of the administered prices has been revised for January 2015 to December 2017. This revision was caused by the comprehensive reassessment of the administered prices based on a new methodology for identifying administered prices. Also in 2023, the HICP-AP underwent a recomposition due to the rearrangement of product groups in the CPI caused by the introduction of a new base year and adjustment of the weighting scheme.

18.1.1. Weights

The main sources for the weights are the sample survey of income and expenditure (Einkommens- und Verbrauchsstichprobe), the continuous household budget survey (Laufende Wirtschaftsrechnungen), National Accounts and tax statistics.

The weights of the different aggregation levels are updated yearly by using provisional results of national accounts from the year before last (t-2). Then, price-updating to the previous year’s December price level is carried out.

18.1.1.1. Compilation at elementary aggregate level

Every five years, the weighting pattern for the national CPI, from which the weighting pattern for the HICP on the lower level is derived, is redetermined based on a very comprehensive and detailed evaluation of a large number of different data sources and it is specified in a very detailed manner.

When compiling the weights at the elementary aggregate level, overcoverage or undercoverage known in several statistics must be rectified. For instance, the consumption of alcohol and tobacco indicated in the sample survey of income and expenditure and in the continuous household budget surveys is assumed to be too low. Therefore the data are adjusted using the results of excise duty statistics.

In addition to the weighting pattern for goods and services, weighting patterns for outlet types and for the Laender are used. Laender weights are derived from the information on household final consumption expenditure in the domestic territory that is provided in the national accounts of the Laender. For the outlet type weights the following main sources are used: market research data on the turnover distribution in retail trade, official trade statistics, and relevant information available at the statistical offices of the Laender (for the regional breakdown on Laender level).

The lowest level of aggregation for which explicit weights exist (elementary aggregate level) is Product (COICOP-10-digit (own classification for the German CPI))/Outlet/Laender level.

18.1.1.2. Compilation of sub-index weights

The sub-index weights are calculated from the elementary aggregate weights. Hence, the sub-index weights are subject to the same sources and calculations. Until 2021, there have been no exemptions from the procedure of deriving the weights at sub-index level from National Accounts data based on t-2.

In Germany, the current base year 2015 weights of the national consumer price index (CPI) serve as initial values for the calculations. It was originally planned to update these for time t-2. Due to the change in consumption patterns in the pandemic year, the preliminary NA results for private consumption expenditure (t-1 =2020) have now been updated for the HICP 2021. The 2015 and 2020 NA results would be used to determine update factors for all available NA results (COICOP 3- or 4-digit), which would then be applied to all assigned line items (10-digit) in the CPI weighting scheme. The December values included in the annual results were based on estimates. A more detailed description of the weighting of the HICP can be found on our homepage under the following link: Compilation of the HICP weighting pattern for the year 2023 (price base December 2022) - German Federal Statistical Office (destatis.de).

18.1.1.3. Compilation of sub-index weights

Every year, the weighting pattern for the HICP is updated based on national accounts data up to the year before last (t-2) and then adjusted to the price development up to December of the previous year (t-1).

18.1.1.4. Weights – plausibility checking

The HICP weights are calculated in accordance with Commission Implementing Regulation (EU) 2020/1148.

After adjusting the annual weights, test calculations with preliminary indices are executed to detect errors in the new weighting pattern.

18.1.1.5. Price updating

In the context of updating the weighting pattern for the HICP, price-updating to the previous year’s December price level is applied. This procedure is applied to the weights at the COICOP-10-digit level which is the lowest aggregation level of item weights in the German CPI/HICP.

Regarding the 2021 weights, there was no price-updating between year t-2 and year t-1. The expenditure shares were already representative for t-1. The structures of year t-1 were converted to the prices of December of the previous year (t-1 = 2020). For this purpose, the HICP index values for the annual average 2020 and December 2020 (in the deepest available breakdown) were used.

18.1.1.6. Compilation of total household final monetary consumption expenditure

In Germany, HFMCE are derived from national accounts HFCE and are structured according to COICOP. Data sources and methods are described in the respective annual and quarterly inventories, see links below. First results of national accounts for t-1 are published around 15 days after the end of the reporting year (e.g. 15th January). Therefore, data and estimates for the 4th quarter are included in the calculation of t-1. No further adjustments have to be made.

See additionnal information in FSO (Destatis) website:

• Quarterly national accounts inventory based on ESA 2010 methodology (Fachserie 18 Rehie S.31) - Edition 2016.
• Domestic product and national income in accordance with ESA 2010 - Methods and sources  (Fachserie 18 Series S.30) - Edition 2016.

18.1.2. Prices

The manual price collection includes on the one hand the decentralized price collection by price collectors in shops all over Germany and on the other hand the central price collection, which takes place mainly as a survey on the internet.

The additional use of digital data sources allows the statistical offices to increase the number of monthly price observations significantly. For example, for sectors with particularly complex pricing, such as package holidays or premiums for motor vehicle insurance, additional data sources with a high number of observations are used. In addition, modern survey methods such as Web Scraping are utilised. Web Scraping is an automated extraction of internet data. Using such procedures, the number of monthly price observations for online trade and for selected services - such as rental cars or long-distance coaches - has been extended considerably in the light of dynamic price changes.

18.1.2.1. Data Source - overview  

The main sources of price data used to compile the HICP are:

• Price collection in the individual survey units or in the internet
• Web scraping
• Catalogues, price systems, fee scales, laws and administrative regulations
• Price quotes from the internet
• Special databases or data purchased from private providers

18.1.2.2. Scanner data - general information

Currently, scanner data is not used in the regular production.

18.1.2.3. Web scraping - general information

In the FSO, web scraping based on a given sample of products is used to extend, supplement or even replace the manual price collection on the internet. Thereby, web scraping imitates the manual price collection on the internet with respect to the number of products but with a higher frequency. This means that the price of a specific product is collected more than once per month. Bulk web scraping, in the sense that every price from a specific online shop is recorded, is not executed for price statistics in the FSO.

In the German HICP, web scraping is used to collect prices for rental cars, long distances coaches and train journeys and different types of pharmaceuticals. Foreign web-sites are currently not used for price collection via web scraping.

18.1.3. Sampling

18.1.3.1. Sampling design: locations for survey

Below the Laender, the sample is stratified by regions. Therefore, 94 regions are defined where prices are collected for all goods and services in the relevant outlet types. All regions are included in the sample.

18.1.3.2. Sampling design: outlets

In general, the outlet sample shall reflect consumer behaviour. For goods, different market shares of the outlet types are taken into account by explicit weighting. All outlet types whose market shares amount to at least 5% (on Laender level) for a certain type of good are covered. For price collection, the German territory is systematically divided in 16 Laender with 94 regions. In every region, outlets (assigned to relevant outlet types) with a high relevance for private consumption are selected. No outlet category is excluded.

The following categories of outlets are distinguished: 01 Large store/department store, 02 Consumer market/self-service store, 03 Supermarket, 04 Discounter/retail warehouse, 05 Specialist shop, 06 Other retail, 07 Public or private service provider, 08 Internet trade/mail order

18.1.3.3. Sampling design: newly significant goods and services

Newly significant goods and services are identified mainly through household budget surveys but also through other sources such as the press, producer information, production statistics and external trade statistics. Price collectors are asked to monitor the markets and report changes and tendencies for future changes to the Laender offices.

In 2019, two newly significant goods were introduced: 08203 'Other equipment of telephone and telefax equipment' and 08204 'Repair of telephone or telefax equipment'.

New items can be introduced at any time within the scope of the wide item descriptions. By doing so, the survey is always up to date with respect to the consumer behaviour.

Price data is collected every month.

18.3.1. Price collection surveys

The most efficient of the following forms of data collection is used for each of the given product types:

• In the individual survey units, the prices are collected by price collectors from the statistical offices of the Laender.
• As regards retail chains with a uniform pricing structure, in some of these chains central surveys are conducted by specially trained price collectors in one branch of the retail chain concerned.
• Catalogues, price systems, fee scales, laws and administrative regulations are analysed and evaluated.
• Price quotes are collected from the internet.
• Special databases are searched or data are purchased from private providers.
• Data are transmitted by respondents using the IDEV online reporting procedure or survey units are called on the telephone regarding selected products.

Price collectors from the statistical offices collect the prices of a large part of goods and services directly in the survey units. To measure the price development, every month they collect the prices of the same products in the same outlets across the whole country, mostly using mobile data capture devices with integrated plausibility checks.

18.3.2. Timing of price collection

Around the middle of the month, prices are collected over a period of at least one working week. However, the price collection period is longer for products whose prices fluctuate considerably during the month (in accordance with Council Regulation (EC) No 701/2006 relating to collection periods, repealed and replaced by Commission Implementing Regulation (EU) 1148/2020). This applies, for instance, to mineral oil products, fresh fruit and vegetables, and clothing.

Link to HICP legislation

The processing program controls the individual process steps from price collection through the calculation of results and carries out, and documents comprehensibly, (nearly) all calculations. Plausibility checks are built into each stage of processing to prevent data entry errors by issuing warnings if implausible data are entered. Critical data that have been entered by price collectors must be confirmed and/or be specified by specially trained staff of the Statistical Offices.

Additionally, the processing program computes indicators as a basis for further quality checks. Among other things, the most peculiar results must be listed for each product type and be checked by appropriately trained staff of the Statistical Offices after the computation of the Laender results. Furthermore, specially trained staff of the Federal Statistical Office again compares the results of the various Laender. Data that differ considerably will be checked once again.

18.4.1. Data validation - price data

There are different procedures to detect data entry errors. On the one hand, plausibility checks are incorporated in the processing program into each stage of processing which leads to warnings in case of implausible data entry. Critical data entry needs additional confirmation or specification. On the other hand, there are additional checks by specially trained staff of the statistical offices after the calculation of the results. This includes, among others, checks of the most peculiar results for each product type and comparison of the results of all Laender. In case of extreme results, they are checked again either by internet enquiry or by consultation with experts or Laender desk officers.

Detected errors are corrected immediately after they are discovered. Then, the indices are recalculated and published.

Besides this, quantity and quality adjustment procedures ensure that 'like is compared with like' when measuring prices, despite changes in the products offered. As a result, price changes can be interpreted as pure price movements.

18.5.1. Elementary price index formulae

The German HICP is a Laspeyres type index covering the ECOICOP/HICP.

To avoid problems due to zero prices, elementary aggregates are calculated solely by using the Dutot formula.

The following number of decimals (behind per cent figures) is applied for

• surveyed prices: 2
• weights: 5
• compilation: no truncation or rounding
• transmission: 1
• publication: 1

Official figures are always rounded, usually during the last step of calculation prior to publication. Year to year and monthly rates of change are calculated by using published and therefore already rounded figures. There is no truncation.

18.5.2. Aggregation of different data sources

An elementary index is computed based on the Dutot formula for each product type (COICOP-10-digit) in an outlet type in a Land. To this end, the ratio is calculated of the average prices between the reference and the base period. The price base of the HICP is always the month of December of the year before the reference year (t–1).

The elementary indices determined in this way are aggregated using the Laspeyres formula. As regards the product types, the processing program calculates from the elementary indices an index at the 10-digit level for a given product type in a Land, using the product-specific outlet-type weights. As a next step, the Laender results for the respective product types are added up using the Laender weights to obtain federal results. To construct the overall HICP, the 10-digit-level indices for the product types weighted by outlet types and Laender are weighted with the relevant expenditure shares of the HICP weighting pattern. First, the product types are aggregated to obtain all indices at the ECOICOP 2- to 5-digit levels. Using the annually updated rough weights at the ECOICOP 2- to 5-digit levels, these sub-indices are then aggregated to obtain the overall HICP.

18.5.3. Chaining, linking and splicing methods

HICPs are chain-linked every year through the relevant December value (Laspeyres chain index concept).

Splicing is not used for the time series of the German HICP.

18.5.4. Quality adjustment – Detailed information

The German price statistics uses the following quality adjustment methods.

Direct Price Comparison: The direct price comparison can be applied if a replacement model of equivalent quality is available. It is an extreme of a quality adjustment method as the prices of both products are directly compared, hence the share of quality is zero percent and the price change fully enters the index calculation. Particularly for technical products it is precisely defined, for which characteristics of models explicit quality adjustment should not be applied. Usually these are characteristics such as design, fashion or other, very subjective assessment of quality. Typical examples for the consumer price index are amended designs of durable consumer goods as toasters or fashion for clothing.

Price change taken as quality change: As opposed to the direct price comparison a price change between replaced and replacement model is completely attributed to a quality change, i.e. the share of quality thus amounts to 100 percent of the price change. Hence, no price change is measured between the two periods in which the replacement takes place. This method may be suitable if no similar replacement model can be found and the price collector has to choose for example a device of another type of construction or a different product variety as replacement model.

Overlap: Sometimes it may occur that a producer offers various product variants, which differ by a certain characteristic or a combination of characteristics. If both product variants are simultaneously available on the market (overlap period), the price difference can be used as an estimate for the quality change, as the buyer has the choice between the alternatives. The changeover from a replaced to a replacement model has no impact on the price index, hence the price difference between predecessor and successor will not be considered.

Bridged Overlap: This procedure can be used when the new model and the replaced model are not simultaneously available on the market. The method of bridged overlap uses the average price development within the same product group or the average price development of appropriately equivalent models as a reference. Especially in cases of product changes in which it is reasonable to assume that also a price change has been taken in addition to changed material or personal costs, the price development of an appropriate comparison group (of models) is used as a substitute.

Package Size Adjustment: Adjusting the package size quantity is necessary when the quantity of a packaging unit has changed while holding its quality constant. It is crucial for the application of this method that the quantity directly and proportionally affects the monetary value of the product. Thereby, also “hidden” price increases (through reduced quantities at the same price) are captured. In the consumer price index for Germany, package size adjustments are typically conducted in the group of foods and the groups of other consumer goods.

Option Pricing: Using option prices, the estimation of the monetary value of a quality change between a new and its replaced model is conducted by applying list prices of individual product characteristics. This procedure is usually used for more complex products when a certain characteristic turned in the meantime from being an additional option to being part of the standard equipment. In such cases, a part of the amount which had to be paid for the optional equipment can be set as the monetary value of the quality difference. Even optional equipment of other manufacturers can be implemented into the calculation. New cars with additional equipment like special airbags in the consumer price index are an example where this procedure is carried out.

However, in most cases it is not known whether the customer really requires a product characteristic which turned from optional to standard (such that s/he also would have bought it earlier when it was only an additional option). Then, according to international conventions, a share of 50 % of the purchase price is usually considered as the monetary value of the quality change.

Supported judgmental quality adjustment: For some products, there exist transparent procedures involving additional information sources which are able to determine concretely the consumer’s added value of a recently launched model. Typically, this concerns the consumption value of technical products (fuels, energy) or other follow-up costs (maintenance). Examples are refrigerators with amended power consumption or washing machines with amended water and power consumption. Calculating the monetary value of such a quality change, assumptions are needed, e.g. regarding frequency of use and useful life of the new model. Actual market prices are used for the calculation of follow-up costs due to energy sources. This implicitly presumes that also the consumer takes actual prices of energy sources etc. into consideration in order to evaluate the quality of a product.

Hedonics: Hedonics are particularly applied to calculate the price increase of products which strongly change in a short period of time. In the official price statistics, products which are currently quality adjusted by hedonics are desktop PC, printers, hard drives, notebooks, processors, RAM, servers, used cars, tablet PC and residential properties. The hedonic quality adjustment is a statistical procedure which calculates by means of a regression the influence of individual product characteristics, e.g. the size of hard drives in desktop PC, on the price of the product. Thereby, the monetary value of the quality difference between a new model and the replaced model can be determined and taken out of the price change.

Currently there is a labelling in the processing program to indicate prices which are subject to quality adjustment but the applied method of quality adjustment is not recorded. Consequently we cannot provide the percentage or the number of the different methods for quality adjustment. Furthermore the pure percentage/number of quality adjusted prices (independent of the method used) can currently not be provided without considerable effort. Due to the organisation of the consumer price statistics in Germany, only the respective Laender office has access to the price data collected by itself. The FSO does not have permanent access to the price data. In the medium term, it is planned to adjust the processing program to enable the provision of information about the application of quality adjustment.

18.5.5. Seasonal items

Seasonal items are “available for purchase, or purchased in small or negligible volumes, for certain periods in a typical annual cyclical pattern”. These goods and services can notably be found in the COICOP classes fish, fruits, vegetables, clothing, and footwear.

Generally, if prices of seasonal items are missing due to out-of-seasonality, they are forwarded by the price development of comparable goods which are, primarily, actually offered seasonal variants of the same HICP group. In case of no available comparable seasonal good, the prices of a closely related all-seasonal variant are used for forwarding. This procedure was introduced by Regulation (EC) No. 330/2009 on the treatment of seasonal items in the HICP, repealed and replaced by Commission Implementing Regulation (EU) 1148/2020.

Not applicable.