I live in South Korea and my parents live in Canada. I often tell them I paid xxx Won for something and then convert that to Canadian Dollars. Korea’s GNP and Canada’s GNP are very different so it’s not a good way to compare prices. Is there a way I can compare prices in two countries?
Well, GNP really has nothing directly to do with comparing prices. Actually, we’d have to delve really, really deeply into the whole countries’ economies to give a really, really good answer. For example, is what you purchase subsidized by the government in any way? If so it’s really more expensive than you think. How much taxes do you pay in Korea vs. Canada? It goes really, really deep. Cost of living is so much more than simple consumer prices.
That’s too bad. I guess I’ll just have to limit my description of prices to “expensive” or “cheap”
Here’s an interesting article on purchasing power - which includes the “Big Mac Index”, a light-hearted index of the relatice price of the famous burger fro country to country.
Thanks for that jjimm. It’s not an absolutely accurate comparison but if I average a number of items that can be found in both countries then maybe I can give my parents a rough idea of how cheap or expensive something is.
Me and my friends used to do something similiar every time we went to Prague. Since it was pretty hard to convert Czech Kronen to Deutschmarks at the time (something like 16 Kronen to a DM) we just used “beer units”. Since beer cost 10 Kronen (That’s not a typo! Beer in Prague at that time actually cost something like 0.40 US Dollars for half a liter, which is comparable to a pint) in most places, we would figure out the relative prices of things in beer units. You could buy cheap copies of russian watches for five “beer units” which we deemed too expensive. Our room in Prague cost us about three “beer units” a person which we deemed very inexpensive. I guess you could similarly compare the prices of basic foodstuffs (like beer 
) and the average saalries in a country to come to a conclusion on buying power.
I’ve just remembered that there’s a current thread on just this subject at the moment, that gives better info and nuances.
Mycroft Holmes, something similar was done in the UK with Mars Bars - calculating salaries and house prices in Mars Bars proved to be a very accurate index.
The Current Staff Report covers this fairly well (if I do say so meself), although the title “Why is the Latvian lat worth more than the U.S. dollar?” could be misleading.
OK, so let me see if I understand this.
Is it correct to say that when you read somewhere that the average Zengvalian (or whatever) makes only 12 Zengvalis a year, and that 12 Zengvalis a year is equal to only US$200, that one shouldn’t start feeling sorry for the Zengvalis until one learns exactly what the average Zengvalian can buy with his 12 Zengvalis?
In other words, if Porsches in Zengvalia cost half of one Zengvali and a person can feed themselves for an entire year and make house payments on a modern 2000 s.f. house for two Zengvalis a year, then the average Zengvalian is doing pretty well for himself.
Right?
In the OP’s situation, probably the best index is how much he’s making per year or per hour, as compared to how much he could make doing similar work in Canada. If a Canadian house costs five years of (Canadian) salary, and a Korean house costs two years of (Korean) salary, then the Korean house is cheaper (numbers invented; I don’t know the real estate or salary rates in Korea or Canada).
In the OP’s situation, probably the best index is how much he’s making per year or per hour, as compared to how much he could make doing similar work in Canada. If a Canadian house costs five years of (Canadian) salary, and a Korean house costs two years of (Korean) salary, then the Korean house is cheaper (numbers invented; I don’t know the real estate or salary rates in Korea or Canada).
These rough estimates are as good as it gets… when I was getting my English Lit degree, we always spent time trying to figure out how much Mr. Bennett was making in today’s dollars, but it just doesn’t convert–labor was so much cheaper, household goods so much more… also, every place has specialties that are super-cheap there. The same pashmina shawl that costs $400 at Saks, costs $40 in Florence.