Producer prices 1783–1990
The Swiss Farmers Office shows national food producer prices since the year 1911. Starting with the beginning years of the period between the world wars at the latest, it becomes necessary to differentiate between wholesale and producer prices since the former reflect the price development of imported goods in addition to those for domestic products. This circumstance caused us to print the producer prices for plant and animal foods not only for the 19th and early 20th century, but also for the period of 1920–1989 where reliable wholesale statistics are available.
Our aggregated producer price series for the period of 1783–1910 were calculated by Heiner Ritzmann. As a basis for his estimates, Ritzmann used the price indices for milk, cheese, beef and veal given in Thomas Steiger’s dissertation, the regional price series compiled by Hans Brugger in the “Swiss Statistical Agricultural Handbook” (“Statistisches Handbuch der schweizerischen Landwirtschaft” / “Manuel statistique de l’agriculture suisse”), and primary sources such as for example the “Bernisches Intelligenzblatt,” the “Cultivateur genevois”, and the “Walliser Amtsblatt” / “Bulletin Officiel du Valais”.
Wholesale index 1921–1963
In 1928, the Federal Labor Office – the later Federal Office for Industry, Trade, and Labor (BIGA/OFIAMT) – published its first official Wholesale Price Index (GPI) as well as indices for major categories of goods (Price Indices of Groups of Goods, and for particular goods (Product Price Indices). Goods categories were defined as follows: 1. Animal foods; 2. Vegetable foods; 3. Foods for industrial processing; 4. Raw and auxiliary materials; 5; Animal feed stuff and fertilizers. The fourth group was divided into the following subgroups: a. Construction materials; b. Metals; c. Textiles, leather, and rubber; d. Fuels; e. Processing fuels and chemicals. For the years 1921–1927, the Office retrospectively estimated the index values for all goods and groups of goods. The movement of group indices for the period of 1921–1963 can easily be recreated using the figures in the Swiss Statistical Yearbook. In contrast, the movement of product indices was not recorded past the year 1931 in any of the statistical source books we used. We nevertheless succeeded in reconstructing the course of wholesale prices of 78 goods also for the period of 1932–1963. For the years 1932–1938, we could avail ourselves to figures stored by the Federal Office for Industry, Trade, and Labor (BIGA/ OFIAMT). We would like to thank Mr. Walter Hänni of the wholesale price section for providing us with access to this valuable data. A BIGA/ OFIAMT brochure (author: Walter Hänni) instructs about the further development of product indices up to the year 1963.
We therefore had several statistics to consult with for determining the relative changes of product prices for the period of 1921–1963. Since the sources originate in different basis years (1914, 1926/27, and 1939) there was a need for basis adjustment. This is the reason that the price series presented by us in this volume does not represent the true course of the respective indices with complete accuracy. However, the base changes performed by us most likely had minimal impact on the quality of the index series.
Wholesale index 1963–1992
In one fell swoop, the revision of 1963 turned the Swiss wholesale index, which for the period 1921 to 1963 had essentially consisted of the raw material index complemented by a few semiprocessed goods, into a much more comprehensive aggregate value. The table part of this chapter only shows part of the numerous additional goods included in the overall index since its 1964 construction.
Absolute wholesale prices since July 1914
The handwritten BIGA/OFIAMT statistics covering the period of 1921–1963 also contain records for the level of absolute wholesale prices. The Federal Labor Office’s estimated absolute wholesale prices for the month of June of the year 1914 were ex post. After 1963, the absolute wholesale prices were printed in the journal “The Economy” (“Die Volkswirtschaft” / “La vie économique”), with the variety of listed goods continuously diminishing in the 1970s and 1980s. We limited ourselves to showing prices published in September for certain sample years.
Wholesale index 1806–1928
In the National Fund project “Contributions to the quantitative description of economic development in Switzerland in the 19th century” (“Beiträge zur quantitativen Beschreibung wirtschaftlicher Entwicklung in der Schweiz im 19. Jahrhundert”), Erich Projer constructed a wholesale index which covers the years 1806–1928. It is a very solid estimate, but, compared to later BIGA/ OFIAMT surveys, suffers from the disadvantages of being mainly based on primary data which covers uneven time periods, refers to heterogeneous goods, and represents producer prices. This caused us to refrain from printing the absolute price series. Instead, we present the price for one single sample year (whenever possible the year 1914) for a few precisely specified products, such as 17 vertical hole Zurich bricks. Those who use such values and their respective index series to determine absolute prices in earlier decades should realize that such an operation will yield at best approximate figures of limited value.
When reconstructing the wholesale index for the 19th and early 20th century, Projer consciously used the BIGA/OFIAMT methodology as a guideline. Upon closer examination, however, there are two substantial differences between the two estimating concepts. The official wholesale index is divided into ten groups of goods, that of Projer only into nine. Projer did not consider the groups Feed stuff and Fertilizers, but, conversely, shows a group for paper which is not contained in the official index. Second, in contrast to the BIGA/OFIAMT, Projer divided the group textiles and leather into five subgroups (cotton, silk, wool, linen, as well as leather and skins) in order to take into account the much larger relevance of the Swiss textile industry of the 19th and early 20th century.
Probably the biggest difficulty Projer had to overcome when constructing his index that covered more than 120 years was the fact that he had to consider structural changes in production and consumption and the substitution of old products with newer consumer goods. Projer solved this problem by basing his index on five different shopping baskets. He weighted individual products based on respective domestic consumption; where that value was unknown, he backed into it using production figures. When those were unavailable as well, he had no choice except to leave out the construction of part of a series or a whole series.
Though Projer reviewed a multitude of sources – company records, price figures in newspapers and association publications, official price surveys – he only succeeded in a few cases in developing homogenous goods price series covering an extended period of time. Projer’s product indices thus generally distinguish themselves by consisting of bits and pieces which cannot be easily compared with one another.
By weighting individual product indices according to a certain scheme, Projer arrived at a set of highly aggregate price indices. In a last step, he processed those group indices into an overall summary index.
Consumer price indices since June 1914
In 1922, the Federal Labor Office first computed and published a national consumer price index. It referred to the price levels of June 1914 and initially covered only the three groups food, fuel and luminous matter, and apparel. In 1926, the summary index was complemented by the addition of rent levels of apartments. The Office used the occasion of this first revision of the consumer price index to extend the new index for each group back to the year 1915.
There were further revisions to the consumer price index in the years 1950, 1966, 1977, 1982, and 1993. With each of these revisions, the palette of goods included in the index grew, and the weighting scheme changed. Since September of 1966, when the limitation of the index to essential goods was dropped, the index represents the entire spectrum of private consumption.
Consumer price index 1811–1890 and 1890–1921
The consumer price index for the years 1811–1890 shown in the table portion of this chapter must be viewed as a rough estimate. Starting with the movement of prices of important retail goods in the cities of Zurich, Berne, and Basle, Hildegard Muff constructed an index series covering the period 1851 to 1890 in her contribution to the National Fund project “Money supply and economic growth in Switzerland 1851–1913” (“Geldmenge und Wirtschaftswachstum in der Schweiz 1851–1913”). In order to arrive at a deflator covering the preceding four decades, we later linked this series with Projer’s wholesale index.
For the following three decades, the consumer price index was estimated by the authors of the National Fund project “Real salaries of Swiss industrial workers 1890–1921” (“Reallöhne schweizerischer Industriearbeiter von 1890 bis 1921”). First, using household budget tabulations, the expense picture of laborer households was reconstructed, though only the German speaking part of Switzerland was considered. A weighting scheme was developed for the year 1910 and applied to the entire study period. The maximum income level for heads of households was set at 2000 Swiss francs; household calculations which did not fulfill this requirement were not included in the study.
The retail prices which the consumer price index for the years 1890–1921 is based on refer to the cities of Zurich, Berne, Basle, Winterthur, Biel/ Bienne, the Zurich upland (“Oberland”), and the area of Burgdorf-Langenthal. Strictly speaking, the index therefore is only representative of urban centers and the industrialized communities of the Swiss German speaking midlands. When preparing subindices for the groups food, beverages, heating, and lighting, the participants of the abovementioned National Fund project were able to rely on official and semiofficial price records as well as on price lists from consumer unions. The data required as a basis for the calculation of a rental price index stems from apartment surveys, official rent statistics, and rent ads published in the daily press. In addition, they used department store catalogs to arrive at a price index for clothes and furniture.
The absolute price series used for the construction of the consumer price index are therefore statistical artifacts insofar as they originate from different sources. The partially drastic heterogeneity of the data lead the authors to use the official figures from the early 1920s as the origination point for the estimate, and then link them backwards with the price series of the consumer unions and the fragmented statistics found in contemporary periodicals and other sources. This procedure enables the fitting of price recordings from secondary and tertiary sources to the level of official price series.
Absolute retail prices 1861–1992
An official statistic on absolute retail price based on prices in 34 large and medium cities exists since 1921. This statistic ceased to be published after 1966. In order to present the development of the most important retail prices of the last two and a half decades, we had to use handwritten materials which Mr. Thomas Gross of the BIGA/ OFIAMT section Prices and Consumption was nice enough to supply us with.
For the city of Zurich, we have absolute price series dating back to the year 1861. For the period of 1861–1890 they are based on data from the daily press and price lists of the Consumers Union of Zurich. It should be noted that the figures of the Consumers Union are generally substantially lower than the average retail prices. For the years 1890–1921 we took the absolute retail prices for the cities of Zurich, Basle, and Berne from the abovementioned National Fund project. It seemed appropriate to complement the two price development overviews in the city of Zurich (1861–1890 and 1890–1921) with a third table which covers the period of 1909–1992 and is based on the Statistical Yearbook of the city of Zurich. A further table informs of the development of important retail prices in the city of Berne in the period of 1914–1991.
This central portion of any modern price statistic is only peripherally covered in this publication. There is information about the evolution of the rental price index for a three room apartment in the Swiss German speaking midlands and in the Zurich upland (“Oberland”) in the years 1890–1921, about the major results of the national apartment inquiries of 1920 and 1950, and about the rent movements for two, three, and four room apartments in the city of Zurich between 1920 and 1960. A comprehensive historical-statistical review of the area “apartments” in general, and the development of the apartment market since 1960 in particular, remains a desirable topic for research.
SOURCE: «Prices» in Ritzmann/Siegenthaler, Historical Statistics of Switzerland, Zürich: Chronos, 1996, 473-478