Austria's accession to the European Union in 1995 has focused the attention of the public on the relatively high level of consumer prices, with West Germany serving as the main standard of comparison. A price survey conducted by the Chamber of Labor in Vienna allows a detailed comparison of absolute prices (net of the value-added tax) of food and beverages and prices of selected manufacturing goods in Vienna and Berlin for the years 1994-1997. Starting in 1995, prices in Vienna gradually approached the level of prices in Berlin, and in 1996 or 1997 many items were cheaper in Vienna than in Berlin. The range of prices for the same article across retail shops in Vienna was, however, substantially wider than in Berlin: given the same average price level in Vienna as in Berlin, consumers in Vienna must allow more time to search for the lowest price than consumers in Berlin. An analysis of prices of articles bought in drug stores (including prices of pet food) by type of store (discount store, super market, regular store) reveals that in general prices in super markets and in discount store are lower than elsewhere, but shopping in these stores does not alleviate the search problem to a significant degree. First, for each type of store price differentials are very large. For example, prices charged for a certain basket of goods in the most expensive discount store are 15 percent higher than in the cheapest discount store. Second, the range of prices in discount stores and super markets overlaps to a large extent with the range of prices charged in regular stores. A consumer, who instead of shopping in the "store around the corner" drives or walks to a more distant discount store or super market cannot reckon to get the best bargain. Thus, the consumer cannot follow a simple rule in the search for the lowest price.
Große Preisunterschiede zwischen Einzelhandelsgeschäften; Great Price Variation Across Retail Shops
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