Purchasing Power Parity

The foreign exchange guy that is still in me wants to have something to do.

Accordingly to Wikipedia, “Purchasing Power Parity (PPP) is a way of measuring economic variables in different countries so that irrelevant exchange rate variations do not distort comparisons. Purchasing power exchange rates are such that it would cost exactly the same number of, for example, US dollars to buy Euros and then buy a basket of goods in the market as it would cost to purchase the same goods directly with dollars. The purchasing power exchange rate used in this conversion equals the ratio of the currencies’ respective purchasing powers (reciprocals of their price levels).”

So I have collected some goods for the basket. I will create some sort of weighting system to create an index later. For now, here is a look at the costs of some of these items.

PS: yes I realize I don’t have any fresh food here. The local fresh fruit don’t provide a printed out receipt. I will report back on the usual items.

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