A purchasing power parity (PPP) calculator is a tool that allows users to compare the cost of living in different countries or regions. It does this by taking into account the prices of a basket of goods and services, such as food, housing, transportation, and healthcare, in each location. The PPP calculator then uses this information to calculate a PPP exchange rate, which is the number of units of one currency that are required to purchase the same basket of goods and services in another country.
PPP calculators are important because they can help individuals and businesses make informed decisions about where to live or do business. For example, a business may use a PPP calculator to determine which country is the most cost-effective place to open a new factory. Similarly, an individual may use a PPP calculator to decide which country offers the best cost of living for their needs.