Comparison of urban districts

The urban districts of Munich and Erlangen are the only urban districts in the top ten list – all others are rural districts. This shows that many inhabitants with high purchasing power continue to live in the commuter belts outside of urban areas, despite the trend toward reurbanization. Taking into account just the urban districts with more than 200,000 inhabitants yields the following urban distribution of purchasing power in Germany:

Ranking of urban districts with more than 200,000 inhabitants

source: GfK Purchasing Power Germany 2016 *index per inhabitant; 100 = national average; ** more than 200,000 inhabitants

When comparing districts, purchasing power levels in the city center areas of metropolitan regions are frequently lower than expected. This is due to the fact that many students with low income in large university cities overshadow high purchasing power inhabitants in the same areas. For example, the city state of Hamburg is Germany's second most populated district and exceeds all other federal states in terms of per-capita purchasing power. But significant variations in purchasing power are apparent at the more granular district level. Hamburg is ranked just eighth among urban districts with more than 200,000 inhabitants, and just 52 among Germany’s urban and rural districts.

Substantial regional differences often exist side by side: Among Germany's urban districts, the urban district of Berlin is ranked 26, with a purchasing power index of 91.4. The neighboring urban district of Potsdam falls outside the ranking of Germany’s large urban districts with 164,000 inhabitants, but has a purchasing power index of 98.6, which is around the national average. The neighboring rural district of Potsdam-Mittelmark places even higher with a purchasing power index of 100.6, which makes it the district with highest purchasing power in Germany’s eastern federal states.

About the study

GfK Purchasing Power is defined as the sum of the net income of the population, as measured at the place of residence. These purchasing power figures take into account income related to self- and non-self-employment as well as capital gains and government subsidies, such as unemployment assistance, child benefit and pension contributions. Expenditures related to living expenses, insurance, rent and associated costs such as utilities (gas and/or electricity), clothing and savings plans have to be covered by this sum. As a result, a nominal increase in purchasing power does not mean that each individual has more actual money at his or her disposal if rising costs for the above-mentioned expenditures exceed the purchasing power increase. Also important to note is the fact that the purchasing power of a given region reflects an average value among the inhabitants living there rather than the purchasing power of specific individuals, households or the associated income distribution and gap between "rich" and "poor".

Calculations are carried out on the basis of reported income and earnings, statistics on state taxes and deductions as well as economic forecasts provided by leading economic institutes. GfK releases the purchasing power prognosis for the new year in January. As of that time, GfK purchasing power data is available for all of Germany's urban and rural districts, municipalities and postcodes. The purchasing power data for street segments is updated in the second half of the year.

Applications of purchasing power
The regional GfK purchasing power data serves as an important planning basis for sales and marketing endeavors among companies from a diverse range of branches. These applications require a realistic depiction of the regional distribution of purchasing power. The focus of the study is consequently not on tracking data trends over the years, but rather on providing a prognosis that reflects this regional distribution. It is therefore not advisable to compare current figures with data from previous years.