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Purchasing Power Parity data methodology

We calculate Purchasing Power Parity (PPP) multipliers for prices based on data from the World Bank API.

We fetch data from two World Bank indicators:

PA.NUS.PRVT.PP: PPP conversion factor for private consumption (LCU per international $)

This provides us with a value in each country’s local currency representing the cost of a basket of goods equivalent to $1 USD (for example, as of writing in 2025, Brazil has a PPP value of R$2.52 BRL, computed in 2024).

PA.NUS.FCRF: Official exchange rate (LCU per USD, period average)

This database provides official world-bank exchange rates, which are updated and averaged on a yearly basis (for Brazil, it’s 5.39 BRL = 1 USD from 2024).

Formula

We convert each country’s local currency to USD using the World Bank’s exchange rate data, then divide by 1 to get the PPP factors. The final multipliers we calculate for each country are indexed by your store’s country (specified in your Company information settings), such that the multiplier for your home country is always 1, using the following formula:

\begin{aligned} M &= 1 + s \cdot \left(\frac{P_c}{e_c} \cdot \frac{e_b}{P_b} - 1\right) \\ \\ \text{where: } \quad P_c &= \text{country PPP factor} \\ P_b &= \text{store country PPP factor} \\ e_c &= \text{country exchange rate} \\ e_b &= \text{store country exchange rate} \\ s &= \text{scale factor} \end{aligned}

Scale factor

You may configure a “scale”, which is a number between 0 and 1 that interpolates between the computed multiplier and 1. In other words, 0 means the PPP factor does not affect your pricing at all, and 1 means the PPP factor is used as-is.

Minimum order item amount

You may also configure a “minimum order item amount” – we recommend setting this to at least $1 or equivalent, since Stripe requires minimum amounts depending on currency.

Why don’t we use daily exchange rates?

We don’t use daily exchange rates, since the PPP conversion factors are only updated at most yearly, and recorded at a point in time congruent with the exchange rate data. During the purchase process, customers’ local currencies are converted to your store’s currency using up-to-date exchange rates, and so we do not believe it makes sense to update the multipliers with the latest exchange rates, as this would overcorrect the values.