The use of scanner data to compile regional price indices in Germany with an outlook to income inequality

Abstract

Statistics about regional price levels in Germany are rare due to the lack of suitable data in official statistics so far. Regional price indices, however, are of major importance in order to determine intra-and international wealth differences or to compare for regional economic power. Using newly acquired scanner data of the German Federal Statistical Office, this work examines how prices for food and beverages differ regionally in the year 2017 on NUTS 3 level by calculating a multilateral GEKS-Fisher-Index. Subsequently, we perform an exploratory multiple linear regression in order to find the most important drivers for high regional prices. We find that price levels rise with local average income and wage, with population growth and with the area of the respective NUTS 3 region. In contrast, price levels decrease with the amount of competition and are, ceteris paribus, lower in Western Germany. Lastly, we merge our data with income data of the Sample Survey of Income and Expenditure (EVS) and find that regional income inequality measured by the Gini coefficient decreases by 0.0009 when considering regional price disparities.