Talk:Purchasing power parity

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Text and/or other creative content from Purchasing power parity was copied or moved into Relative Purchasing Power Parity with this edit. The former page's history now serves to provide attribution for that content in the latter page, and it must not be deleted as long as the latter page exists.

"Major rewrite"

I've just done a major rewrite.rajkumar The new version clarifies what the PPP method is, what it's used for and why, and what issues it has. I also removed all references to a PPP "theory." PPP is a method, not a theory. I know of no theory saying that "in equilibrium, the exchange rate that will prevail between two countries will be that which equalizes the prices of traded goods in each country." The whole point of using PPP is that using real exchange rates, goods won't cost the same amount in different countries. Isomorphic 01:46, 10 Jun 2004 (UTC)
- Because of so called arbitrage some prices strive towards a common price. For example prices for precious metals like gold doesn't range widely across borders. Gold ([1]) cost $420 US dolllars per troy ounce in most parts of the world. If it sold for $200 bucks per ounce in Canada or even China it would sell out pretty quick. While things like a Big Mac is not as easily arbitraged across wide distances.

Price comparisons just horizontal, or vertical too?

Are the comparisons in prices of goods done only horizontally, i.e. comparing the price of a McDonalds in UK and the price of a McDonalds in the US, or do they compare the prices vertically too, like for example the price of a McDonalds hamburger compared to the price of a burger made from Kobe beef?

Average?

Are average prices in a country usually counted or lowest ones (or highest?)?. Because, like, India is a country with huge population, with different regions. Are average prices for India taken, or the cheapest region or what? --95.24.65.62 (talk) 16:28, 18 May 2023 (UTC)[reply]

What's ICP?

I see it used in this article and elsewhere, but I don't know what it means. Thanks, DavidMCEddy (talk) 12:47, 14 April 2024 (UTC)[reply]

I found it: International Comparison Program. I then found it spelled out in this article and added "(ICP)" immediately after, so others who don't know can more easily find it. I also added it to the "ICP" disambiguation page. DavidMCEddy (talk) 20:13, 14 April 2024 (UTC)[reply]

Quality

Range and quality section doesn't mention quality at all which is a highly relevant point.

The quality assurance that you get from a purchase in the EU is going to be far higher than most other regions. You are paying not just for the product but the inherent QA. 37.228.238.174 (talk) 12:23, 1 May 2025 (UTC)[reply]