Relocation · 6 min read
What purchasing power adds to a tax comparison
How to use PPP and cost indices without pretending they are a personal budget.
Currency conversion tells you what money exchanges for. Purchasing-power adjustment estimates how much local consumption it may buy.
PPP is a broad lens
National indices average many goods and households. They are valuable for a first-pass comparison but can hide the high cost of expatriate housing, international schools and private healthcare.
Build a personal basket
Use the index to screen destinations, then replace it with prices for your likely neighbourhood, household size and lifestyle. Keep savings goals in the currency in which they will eventually be spent.