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The aggregate level of retail prices in Slovenia is much lower than in Austria. For the average of the sample in February 1992, it was 25% lower (calculated on basis of the official exchange rate) and 35% (resp.) lower (calculated on the basis of the market exchange rate). Also the purchasing power of the Slovene average net wage is much lower than the purchasing power of the average net wage in Austria. After 1987 it was constantly diminishing and in February 1992 reached only a good fifth of the Austrian one (21,2%). Disparities in retail prices in Slovenia have several reasons. The basic reasons are disparities in producer prices (which are due to the undervalued primary factors of production and to insufficient activation of factors of production of higher ranks), the system of turnover taxation and administrative price regulation.