Living Spending Power: Wunsiedel Outperforms Munich in Bavaria
In Bavaria, the region with the most spending power isn't found in its bustling cities. An analysis conducted by the German Economic Institute (IW) reveals that if income is adjusted for regional cost of living, the top five Bavarian areas with the highest purchasing power are rural districts. The surprising leader in this list? Wunsiedel, surpassing even the most expensive city, Munich, despite having a lower average income.
Munich is often recognized for having the second-highest nominal income per capita in Bavaria, but its cost of living is significantly higher — 25.1% above the German average. This high cost eats away at much of its inhabitants' purchasing power. On the other hand, the district of Wunsiedel, despite having an average income in the middle of the Bavarian pack, enjoys a lower cost of living, which keeps its purchasing power higher.
The IW and the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR) have developed a regional price index, as of 2022, which helps compare the cost of living between different areas. Using this index and income data from the Federal Statistical Office of 2021, the IW was able to calculate the real income, or purchasing power, for each location in Bavaria.
Starnberg leads the pack with the highest real income in Bavaria, boasting around 32,800 euros per year. Augsburg follows closely, still in the top five even though its real income lags behind Starnberg by around 12,000 euros. The midfield houses districts like Miesbach, Munich, Erlangen-Höchstadt, and Wunsiedel, while cities like Munich and Schwabach make up the bottom half of the list.
Cities often face challenges in terms of purchasing power due to their high cost of living. Passau and Bayreuth are prime examples of cities with low nominal incomes that don't make up for it with reduced costs. Meanwhile, other cities such as Regensburg and, in particular, Ingolstadt, suffer from above-average living expenses.
Luckily for Bavaria, the majority of its regions manage to maintain real income levels higher than the German average. Only 17 Bavarian cities and districts fall below the German average in terms of purchasing power.
By taking advantage of lower prices, consumers in Wunsiedel can enjoy a higher purchasing power than those in Munich, despite the city's higher nominal income. While Munich has a substantial income advantage, its higher living expenses significantly reduce the purchasing power of its residents.
Source:
While the specific situation involving Wunsiedel surpassing Munich isn't explicitly addressed in the available sources, the data does suggest that Bavaria, like other regions in Germany, faces economic disparities between urban and rural areas, and that cost of living plays a significant role in determining purchasing power.
