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Consumer price levels in the Netherlands 7th highest in EU23 June 2014, by Benjamin Garstka
Recent data from Eurostat comparing consumer price levels across the 28 European Union (EU) member states reveals that the Netherlands has the seventh highest price levels for consumer goods and services in the EU.
Using price surveys covering more than 2.400 products and services in 37 European countries, the researchers compared price level indices based on purchasing power parities.
Relative to the EU average, price levels in the Netherlands vary the most when it comes to communication services (28 per cent more expensive), food/non-alcoholic beverages and household appliances (both three per cent less expensive).
Methods of price comparison
Using wide-scale surveys as the basis for comparison, researchers analysed goods and services in the following twelve areas:
› Food, beverages, tobacco, clothing, footwear
› Energy, furniture, household appliances, electronics
› Personal transport, communication, restaurants and hotels
For each area, the purchasing power parities (PPPs) of the items included were calculated (methodology here) and then divided by the nominal exchange rate to obtain the price level index (PLI) for the group of goods.
Put more simply, PPPs indicate how much of a similar good or service one could buy in another country taking into consideration the effect of exchange rates.
The PLI for the goods and services listed is a result of the ratios of PPPs to exchange rates, which creates a comparative index with a base of 100 representing the average EU price level.
For each group of goods, the PLI indicates the magnitude of difference in cost if one were to purchase the same item (or mix of items) in different EU countries.
The Netherlands: cheap food, expensive restaurants & cars
Of all goods and services analysed, food and household appliances were the only categories where price levels in the Netherlands were lower (both three per cent less) than the EU average.
Communication services and equipment displayed the largest variance relative to the rest of Europe, being 28 per cent more expensive.
Furthermore, personal transport equipment, including cars, motorcycles and bicycles, showed a relatively large difference with price levels 17 per cent higher than the rest of Europe.
The cost of restaurants and hotels were also quite expensive at 15 per cent more than the EU average.
Price levels around Europe
In total, 37 European countries were compared in the report which included the 28 EU member states, three European Free Trade Association members (Iceland, Norway, Switzerland), four candidate countries and two potential candidate countries.
Of all countries analysed, Switzerland had the highest overall price levels at 56 per cent more than the EU average. Denmark meanwhile had the highest price levels in the EU (40 per cent above average).
The least expensive EU nation was Bulgaria with price levels an average of 48 per cent below the rest of the member states. Closest to the EU average were Germany and Spain, being two per cent more and five per cent less expensive, respectively. One of the largest variations related to specific goods was food and non-alcoholic beverages, being 62 per cent cheaper in Poland while 40 per cent more expensive in Denmark.
Clothing and consumer electronics showed less disparity in price levels, with Hungary and Poland being the respective cheapest countries for these items.
In general, the research shows that price levels are consistently higher in Northern Europe and Switzerland and lower in south-eastern European countries.
Top 12 most expensive EU countries