Purchasing power parity (PPP)

How economists adjust for the fact that the same money buys more in some countries than others.

Converting incomes with market exchange rates ignores the fact that prices differ between countries. A haircut, a meal or rent can cost several times more in one country than another.

Purchasing power parities are conversion rates that make the same basket of goods and services cost the same in every country. Values converted with them are shown in "international dollars" (World Bank) or "purchasing power standards" (Eurostat).

Use PPP-based figures to compare living standards between countries. Use market exchange rates to compare the size of economies in trade or financial terms.

Measures on this site

• GDP per capita, PPP (constant 2021 international dollars) (World Bank)
• GDP per capita in purchasing power standards (EU = 100) (Eurostat)
• Price level of household consumption (EU = 100) (Eurostat)
• GDP per capita in US dollars (World Bank)