Purchasing power parity (PPP) conversion factor

'''Purchasing power parity (PPP) conversion factor '''

definition          The PPP conversion factor shows how much of a country's currency is needed in that country to buy what $1 would buy in the United States. By using the PPP conversion factor instead of the currency exchange rate, we can convert a country's GNP per capita calculated in national currency units into GNP per capita in U.S. dollars while taking into account the difference in domestic prices for the same goods. Thus PPP helps us compare GNPs of different countries more accurately. Because prices are usually lower in developing countries, their GNP per capita expressed in PPP dollars is higher than their GNP per capita expressed in U.S. dollars. In developed countries the opposite is true.

                             http://www.worldbank.org/depweb/beyond/global/glossary.html