Price level on Svalbard 2001
Prices more similar to mainland
A recent survey shows that the general price level for a household on Svalbard is around 8 per cent lower than for a household on the mainland. The general price level on Svalbard was around 19 percent lower than on the mainland in 1990.
There are different reasons why the price level on Svalbard has become more similar to the general price level on the mainland. Comparatively strong price growth to that of the mainland in the prices of housing and maintenance, food, clothing and footwear, products and services of recreation and culture during the last ten years, seems to be the main reason.
Although the price level that a household on Svalbard faces is comparatively similar to that on the mainland, households on Svalbard still have lower prices, in general. The main reasons are the low prices of alcohol and tobacco, lower prices of vehicles and their maintenance and the comparatively low rentals for housing.
Small differences in price level between Svalbard and the mainland
Presently households on Svalbard have to pay around 12 per cent more for food and non-alcoholic beverages and 8 per cent more for clothing and footwear compared with their counterparts on the mainland. There is not much price difference between the mainland and Svalbard regarding furnishings, household equipment, recreation and culture, insurance, recreational items and equipment.
According to the results of the survey in 1990, the price levels for food and clothes were 7 and 24 per cent lower than on the main land respectively. On the other hand, variety and choice of products available on Svalbard have increased considerably since 1990.
Products and services for recreation and culture cost 7 per cent more for a household on Svalbard than for a household on the mainland. In this consumption group, package tours, recreational products, equipment for camping and gardening items and pet products increase the price level for Svalbard.
Highly taxed products on the mainland are cheaper on Svalbard
Alcoholic beverages are about 50 per cent cheaper on Svalbard than on the mainland. The largest price difference is observed for spirits, since the price level is around 60 per cent lower on Svalbard. The price level for wine is about 39 per cent lower and beer is 52 per cent lower on Svalbard household. This is not so surprising since this has to do with the policy of high taxation on alcoholic beverages. An example is cigarettes, where 70 per cent of the sales price is taxes and duties. Duties and taxes for wine, spirits and beer depend on the alcohol percentage of each type of beverage.
Purchase of vehicles such as cars, snowmobiles and bicycles and their maintenance are cheaper for a Svalbard household. The large price difference between Svalbard and the main land is mainly due to the fact the vehicles on Svalbard are exempted from most of the taxes that a household on the mainland have to pay.
Expensive Food and Clothes, Lower Rentals on Svalbard
Most of the foodstuffs sold on Svalbard have higher prices than on the mainland. Especially milk products, egg and vegetables have higher indices. Higher prices on food can be explained by the expensive airfreight of fresh food products.
A household living on Svalbard pays around 6 per cent more for clothing and 17 per cent more for footwear. One needs special clothes including clothes for snowmobiles, sportswear and special clothes designed for Svalbard's polar climate. This is why a Svalbard household pays around 50 per cent more for clothes than an average household on the mainland. The Household budget survey also shows that Svalbard households particularly buy clothes worn indoors and underwear via mail order catalogues, and that they choose to buy clothes on the mainland when they are on holiday or on other visits.
The consumption group called housing, water and electricity has a 6 per cent lower price level on Svalbard than on the mainland. Materials for maintenance of housing are more expensive on Svalbard, while services regarding the maintenance of buildings in general have lower prices.
Furnishings and household equipment are about 6 per cent cheaper for a Svalbard household, despite extra transport costs. Healthcare services, medicines and education are about 14 percent lower on Svalbard, whereas prices for communication are around 16 per cent lower than on the mainland.
|Price level indices according to COICOP|
|All - Item Index||80,6||91,9|
|Food and non-alcoholic beverages||92,5||112,2|
|Alcoholic bevergaes and tobacco 1||55,2||37,4|
|Clothing and Footwear||75,8||107,8|
|Housing, Water, Electricity, Fuels 2||79,6||93,7|
|Furnishings, Household Equipment||90,1||94,2|
|Recreation and Culture 2||89,2||107,5|
|Restaurants and Hotels 2||84,1||89,5|
|Miscellaneous Goods and Services 2||83,6||94,4|
|1||This group inluded alcoholic beverages in 1990.|
Composition of these groups were different in 1990, therefore they are not directly comparable to 2001 figures.