|English: Various Euro bills. (Photo credit: Wikipedia)|
In 2011, price levels for consumer goods and services differed widely across Europe. Among EU Member States, in Denmark consumer prices were 42 % higher than the average of the 27 EU Member States, while the cheapest country was Bulgaria (49 % below the average). If the price level index is higher than 100, the country concerned may be considered to be relatively expensive compared with the EU average and conversely, if the price level index is lower than 100, then the country is relatively cheap compared with the EU average.An understanding of the differences in price levels is important in the comparison of economic data, such as gross domestic product, because higher relative prices could make an economy look healthier than it really is. Observing price level differences is also important in the analysis of the development of the EU'ssingle market for goods and services.
Main statistical findingsFigure 1 shows the price level indices (PLIs) for total household final consumption expenditure (HFCE) on goods and services in 2011. Switzerland and Northern European countries tend consistently to have the highest prices, while south-eastern European countries show the lowest prices.
Food, beverages, tobacco, clothing and footwearTable 1 shows the PLIs for four important groups of consumer goods and services (see below for a description of the content of each product group):
- food and non-alcoholic beverages;
- alcoholic beverages and tobacco;
Energy, furniture, household appliances and consumer electronics
- energy (electricity, gas and other fuels);
- household appliances;
- consumer electronics.
Personal transport equipment, transport services, communication, restaurants and hotels
- personal transport equipment;
- transport services;
- communication (services and equipment);
- restaurants and hotels.
Data sources and availability
The PPP concept
Price level indices
Definition of the product groups
- Food and non-alcoholic beverages: bread and cereals; meat; fish; milk; cheese; eggs; oils and fats; fruits; vegetables; potatoes; other food; non-alcoholic beverages.
- Alcoholic beverages and tobacco: spirits; wine; beer; tobacco; and narcotics.
- Clothing: clothing materials; men's, women's, children’s and infant’s clothing; other articles of clothing and clothing accessories (excludes cleaning, repair and hire of clothing).
- Footwear: men's, women's, children's and infants' footwear (excludes repair and hire of footwear).
- Electricity, gas and other fuels: electricity; gas; liquid fuels; solid fuels; and heat energy (all for domestic use).
- Furniture and furnishing, carpets and other floor coverings: kitchen furniture; bedroom furniture; living-room and dining-room furniture; other furniture and furnishings; carpets and other floor coverings (excludes repair of furniture, furnishings and floor coverings).
- Household appliances: refrigerators and freezers; washing machines; dishwashers; cookers; microwave ovens; vacuum cleaners; coffee makers; kettles; toasters, etc. (excludes repair of household appliances).
- Consumer electronics: televisions; DVD players; receivers; audio systems; MP3 players; cameras; camcorders; desktop and laptop computers; monitors; printers; scanners; software; music CDs; movie DVDs; empty CDs and DVDs etc (excludes repair of such equipment).
- Personal transport equipment: motor cars; motor cycles and bicycles (excludes maintenance and repair of personal transport equipment, spare parts and fuels).
- Transport services: Passenger transport by railway, by road, by air, by sea and inland waterway and other purchased transport services (e.g. left luggage services, removal services).
- Communication: postal services; telephone and telefax equipment; telephone and telefax services.
- Restaurants and hotels: restaurants; cafés; pubs; bars; canteens; hotels; youth hostels etc..