Overview
The PPP library calculates fair, localized pricing by adjusting a base USD price according to a country’s purchasing power. This ensures that your product remains affordable and accessible across different economies.
The Price Level Ratio
At the core of PPP calculations is the Price Level Ratio - a measurement of how expensive goods and services are in a country compared to the United States.
The library uses the World Bank’s “Price Level Ratio of PPP conversion factor (GDP) to market exchange rate” indicator (code: PA.NUS.PPPC.RF).
Understanding the Ratio
The Price Level Ratio tells you how much purchasing power a dollar has in different countries:
~0.29 (Sri Lanka): Goods cost approximately 29% of US prices1.0 (United States): The baseline - goods cost 100% of US prices>1.0 (Switzerland: 1.08): Goods cost more than in the US
You can retrieve the raw Price Level Ratio for any country using the ppp.factor() method:import ppp from '@sachithrrra/ppp';
console.log(ppp.factor('LK')); // 0.28885598326474304 (Sri Lanka)
console.log(ppp.factor('US')); // 1 (United States)
console.log(ppp.factor('CH')); // 1.077727161298933 (Switzerland)
Step 1: Apply Smoothing
adjustedFactor = factor + (1 - factor) * smoothing
Step 2: Calculate Final Price
finalPrice = originalPrice * adjustedFactor
Complete Example
Let’s calculate the fair price for a $100 product in India (factor: 0.2415) with default smoothing (0.2):
import ppp from '@sachithrrra/ppp';
// Step 1: Get the Price Level Ratio
const factor = ppp.factor('IN'); // 0.2414642718807555
// Step 2: Apply smoothing (0.2 default)
const smoothing = 0.2;
const adjustedFactor = factor + (1 - factor) * smoothing;
// adjustedFactor = 0.2415 + (1 - 0.2415) * 0.2
// adjustedFactor = 0.2415 + 0.1517 = 0.3932
// Step 3: Calculate final price
const finalPrice = 100 * adjustedFactor; // $39.32
// Or simply:
console.log(ppp(100, 'IN')); // 39.31714318469772
With no smoothing (0), the price would be 24.15∗∗(veryaggressivediscount).Withmaximumsmoothing(1),thepricewouldremain∗∗100 (no discount). World Bank Data
The library includes PPP conversion factors from the World Bank for 200+ countries and territories. The data is embedded in data.json and includes both 2-letter and 3-letter ISO country codes.
Data Structure
The data is stored as a simple key-value mapping:
{
"USA": 1,
"US": 1,
"LKA": 0.28885598326474304,
"LK": 0.28885598326474304,
"IND": 0.2414642718807555,
"IN": 0.2414642718807555,
"CHE": 1.077727161298933,
"CH": 1.077727161298933
}
- 3-letter code (ISO 3166-1 alpha-3):
USA, LKA, IND, CHE
- 2-letter code (ISO 3166-1 alpha-2):
US, LK, IN, CH
Country Code Lookup
The library normalizes all country codes to uppercase, so both 'us' and 'US' work:
import ppp from '@sachithrrra/ppp';
// All of these work:
console.log(ppp(10, 'US')); // 10 (United States)
console.log(ppp(10, 'us')); // 10 (case-insensitive)
console.log(ppp(10, 'USA')); // 10 (3-letter code)
If an invalid country code is provided, the function returns null:console.log(ppp(10, 'INVALID')); // null
console.log(ppp.factor('XYZ')); // null
Real-World Examples
Example 1: SaaS Subscription Pricing
A SaaS product costs $49/month in the US. Let’s calculate fair prices for different markets:
import ppp from '@sachithrrra/ppp';
const basePrice = 49;
// Nigeria (factor: 0.119) - Low purchasing power
console.log(ppp(basePrice, 'NG', 0.2, 'pretty')); // 14.99
// India (factor: 0.241) - Lower-middle income
console.log(ppp(basePrice, 'IN', 0.2, 'pretty')); // 19.99
// Poland (factor: 0.490) - Upper-middle income
console.log(ppp(basePrice, 'PL', 0.2, 'pretty')); // 29.99
// United States (factor: 1.0) - Baseline
console.log(ppp(basePrice, 'US', 0.2, 'pretty')); // 49
// Switzerland (factor: 1.078) - High cost of living
console.log(ppp(basePrice, 'CH', 0.2, 'pretty')); // 55
Example 2: Digital Product Pricing
An ebook costs $29 in the US:
import ppp from '@sachithrrra/ppp';
const ebookPrice = 29;
// Egypt (factor: 0.175)
console.log(ppp(ebookPrice, 'EG', 0.2, 'currency')); // 12.27
// Brazil (factor: 0.462)
console.log(ppp(ebookPrice, 'BR', 0.2, 'currency')); // 16.75
// United Kingdom (factor: 0.849)
console.log(ppp(ebookPrice, 'GB', 0.2, 'currency')); // 27.99
Why This Matters
Charging the same price globally ignores vast economic differences:
- $10 in the US: A quick lunch
- $10 in Sri Lanka: Could be a day’s wage
- $10 in Switzerland: Less than a coffee
By using PPP-adjusted pricing, you make your products accessible to global markets while maintaining fair value across different economies.
The default smoothing value of 0.2 provides a balanced approach that offers meaningful discounts without being overly aggressive. Adjust this value based on your business model and target markets.