what's the term to describe cost of living with different currencies?

[Howitzer]

Just bear with me guys while i describe what i mean

So 1 sterling pound = 50 thb give or take.

a bowl of noodles from a roadside store in thailand would be say around the ball park of maybe 30thb give or take so that would be 60 cents in pounds.

In contrast a bowl of noodles would cost around maybe say 6 pounds minimum in the UK so in thb that would be around 300thb.

Is there a term to use to describe all of these different currency exchange rates on top of the cost?

Let's just assume everything in thailand was as expensive as in the UK. Then ordinary everyday items would be 200 bht minimum.

British and american people tend to calculate their items not in the 100s. So a normal meal to them would be say less than 10 in their currency but for people say in thailand, indonesia since their money is so small 1000 in their currency is actually a very small amount so it really starts to get confusing if you have been used to small denominations.

[Costas2008]

"that would be 60 cents in pounds."

Pounds have pennies.....not cents.

As about the rest......didn't understand what are you trying to say...........

But again.....I'm Greek.

[MrTee]

"that would be 60 cents in pounds."

Pounds have pennies.....not cents.

As about the rest......didn't understand what are you trying to say...........

But again.....I'm Greek.

I'm have to agree with Costas..

I'm lost..

the only term I can think of is "Cheaper".

[Thai at Heart]

Purchasing Power Parity.

[Howitzer]

Was trying to include too much into the picture.

On one hand i was thinking why do some countries create such tiny currencies like say the peso or the ruppiah in which everyday items would start to run up to the thousands. Then it gets more complicated trying to calculate everyday items for people that aren't used to that.

The other issue is just me asking is there a specific term used to describe the cost of items in a country excluding the currency differences. Yes that would be it.

so like the bowl of noodle example i gave. In thailand it's only 60 pence while in the UK it's say 6 pounds upwards.

[Berkshire]

It's called Purchasing Power Parity. Something similar would be the Big Mac Index which uses something tangible that we all understand (i.e., the Big Mac).

[Howitzer]

It's called Purchasing Power Parity. Something similar would be the Big Mac Index which uses something tangible that we all understand (i.e., the Big Mac).

Thanks i think that would be it.

The big mac index is used because all big macs all cost of the same more or less in different countries?

[Berkshire]

It's called Purchasing Power Parity. Something similar would be the Big Mac Index which uses something tangible that we all understand (i.e., the Big Mac).

Thanks i think that would be it.

The big mac index is used because all big macs all cost of the same more or less in different countries?

This link could explain it better than me:

http://www.economist.com/content/big-mac-index

[krisb]

Yep it's called the Scmiztzer monetary comparison system.

Recognized worldwide. Schmitzer was a Jewish guy I believe.

[Jip99]

I would say supply and demand - or, buyer elasticity.

Noodles would sell in the UK at a price the market will bear. Such elasticity is not fully tested until people say "I am not bl00dy paying that for a bowl of noodles".

Example; motor cars in the UK were much higher than the same make/model in Europe. Somebody noticed, shouted 'foul' and prices plummeted in the UK.

Edited February 13, 2015 by Jip99

[starky]

It's called Purchasing Power Parity. Something similar would be the Big Mac Index which uses something tangible that we all understand (i.e., the Big Mac).

Thanks i think that would be it.

The big mac index is used because all big macs all cost of the same more or less in different countries?

actually no, the point is that big macs don't cost the same in different countries. Which is how you are able to compare currencies which was the basis of you OP was it not? If they cost the same there would be no comparison

[Jip99]

Now you understand why so many Brits come to Thailand.

Whilst noodles may 1/10th of the price it is sufficient that Thai beers are 1/6th of UK prices.

It is called the CHANG index.

[samran]

I would say supply and demand - or, buyer elasticity.

Noodles would sell in the UK at a price the market will bear. Such elasticity is not fully tested until people say "I am not bl00dy paying that for a bowl of noodles".

Example; motor cars in the UK were much higher than the same make/model in Europe. Somebody noticed, shouted 'foul' and prices plummeted in the UK.

Not really, what you are describing there is the marginal (last) user given the supply. It also doesn't take into account supply costs and purchasing power.

Elastcity of demand describes what happens to demand when the price of something changes. It is measured as the % change.

Low elasticity means you can change the price a lot and demand will still be pretty much the same, high elasticity means you can change the price a little bit and demand changes a lot.

As such, the elasticty of demand for a bowl of noodles might be the same in the UK and Thailand, given you are measuring the relative change in demand.

Edited February 13, 2015 by samran

[Rooo]

Moved to Money Forum.

[KittenKong]

Now you understand why so many Brits come to Thailand.

Whilst noodles may 1/10th of the price it is sufficient that Thai beers are 1/6th of UK prices.

Noodles are not 10 times the price in the UK, nor is beer 6 times cheaper here. I dont know where people get these prices from.

It would be more precise to say that noodles from a street vendor here cost less than noodles from a proper restaurant would cost in the UK. The price difference stems from the operating costs and not the actual ingredients.

Also for beer, it depends entirely on where you buy it as to whether it is cheaper or more expensive here or in the UK.

[canuckoverseas]

Cost differential is another term