What is The Price Parity Index (PPI )
Hello friends lets understand about PPI The Price Parity Index (PPI) is an economic measure used to compare the purchasing power of consumers across different regions or countries, relative to a standard reference. It highlights the cost differences for similar goods and services in various areas, taking into account differences in income and price levels. Here are the key details of the Price Parity Index: 1. Purpose To measure the relative cost of living or price levels in different regions or countries. Helps compare the affordability of goods and services across areas, adjusting for local economic conditions. 2. Components Basket of Goods and Services : A representative set of products and services used for comparison, such as food, clothing, housing, healthcare, and education. Reference Region or Country : One region is typically selected as the base (e.g., national average or a specific country), and its price level is indexed to 100. Local Prices : The cost of the sa...