Purchasing power parity (PPP)

A method to allow for comparison of household purchasing power across countries, adjusting for price differences.
PPPs compare the purchasing power of monetary units in different countries. A PPP between two different countries indicates the amount you need to spend in one country’s currency in order to obtain the equivalent with 1 unit of the other country’s currency.
For example: PPP Country X <-> Netherlands = 103: For every euro spent in the Netherlands, you need to spend 103 in country X in order to obtain the equivalent. PPPs may also be calculated between countries with the same currency. In that case, they merely reflect the difference in price. Hypothetically: PPP France <-> NL = 1,05 means France is on average 5% more expensive than the Netherlands.