PPP concept, important to know if you want to go abroad.
Starting with an example. Let a thing be 'X'.
- Cost of X in India is 100.
- In most cases, cost of X would be worth around 227 in USA.
- In Canada, worth of X 208.
- In UK (United Kingdom), it'll be 190.
- In Australia, 180.
Conclusion : The value of money in every country is different.
That's the PPP concept.
Purchasing
Power
Parity
| Explained with an image.
Source : https://bit.ly/3pvaUQz
So before going to any other country to get settled, to work or any other reason it would be great to know this thing. With the following example you'll precisely understand everything.
If you are getting a job in US for $50000 which is equivalent to around 40,00,000 in India and the lifestyle you'll be getting with it would be similar to getting a 15,00,000 job in India. Now it doesn't mean you shouldn't go to USA or you shouldn't stay in India, just go where you're getting more opportunities (personal opinion).
Here's a way to calculate PPP :
S = P1/P2
S = Exchange rate of currency 1 to currency 2.
P1 = Cost of good X in currency 1.
P2 = Cost of good X in currency 2.
Website to check PPP for 2 countries https://bit.ly/3A6HzRi by Chrislross.
Gross Domestic Product (GDP) is a very important thing when the PPP concept arises. COUNTRIES ADJUST THEIR GDP FOR PPP VALUE!
Source : https://bit.ly/3dEzewD