What is Purchasing Power Parity data?
Data shown in PPP (purchasing power parity based on international price comparisons) terms is a different concept than data derived using market exchange rates. Because exchange rates do not always reflect international differences in relative prices, PPP rates provide a standard measure allowing comparison of real price levels between countries. By establishing purchasing power equivalence, where one dollar purchases the same quantity of goods and services in all countries, PPP conversions allow cross-country comparisons of economic aggregates on the basis of physical levels of output, free of price and exchange rate distortions. More information about purchasing power parities is available here. The PPP conversion factor in the WDI database applies only at the GDP level. Using it to convert other LCU series to international dollars is not recommended.
