How it works
Every few years the World Bank's International Comparison Program prices the same basket of goods and services in almost every country: groceries, rent, bus fares, haircuts, restaurant meals and hundreds more. From that it publishes purchasing power parities(PPPs), which tell you how much local currency buys what one dollar buys in the United States. The World Bank estimates the years between surveys.
We use the PPP for household consumption, which tracks what people actually spend money on rather than the whole economy. Dividing it by the market exchange rate gives each country's price level relative to the US. A price level of 65 means that once you've changed your dollars into local money, everyday spending costs about 65% of what it would in the US.
Home-equivalent value = amount × (home price level ÷ destination price level)
Worked example
Mexico's price level is 59. So $100 changed into pesos and spent in Mexico buys roughly what $170 buys in the United States: 100 × (100 ÷ 59).
Switzerland runs the other way. At a price level of 128, $100 there stretches only as far as $78 at home.
Comparing two foreign countries works the same way. Spending in Mexico instead of Switzerland makes the same money go 2.2× as far.
What the numbers don't tell you
- They are national averages. Capital cities, tourist areas and imported brands usually cost more than the average.
- Rent varies most. The price level blends everything households buy, so a city with expensive housing can feel pricier than its number.
- Exchange rates move. Price levels use each country's average exchange rate for the data year, so a large currency swing since then shifts the picture.
- Some countries are left out: those with several official exchange rates (where the official rate isn't what people pay) and those without data from the last three years.
Questions people ask
Where does the US dollar go furthest?
On the latest World Bank data, the five countries with the lowest price levels are Egypt ($100 buys like $637), Nigeria ($100 buys like $477), India ($100 buys like $439), Pakistan ($100 buys like $430), Bhutan ($100 buys like $414).
Where does the dollar go least far?
The five most expensive countries for everyday spending are Iceland ($100 buys like $77), Switzerland ($100 buys like $78), Bahamas ($100 buys like $90), Israel ($100 buys like $94), Vanuatu ($100 buys like $96).
Is this the same as the Big Mac Index?
It rests on the same idea, purchasing power parity. The Big Mac Index prices a single burger, while the World Bank prices a full basket of household spending, which makes this a better guide to everyday costs.
Why doesn't this match the exchange rate?
The exchange rate tells you how many euros or pesos you get for a dollar. The price level tells you what those euros or pesos buy once you have them. You need both to know how far your money goes. For today's rate, use our currency converter.
Is Portugal cheaper than the US?
Yes. Portugal's price level is 65, so everyday spending there costs about 35% less than in the United States, and $100 buys roughly what $154 buys at home.
Sources
- World Bank: PPP conversion factor, household final consumption (PA.NUS.PRVT.PP)
- World Bank: Official exchange rate, period average (PA.NUS.FCRF)
- World Bank: International Comparison Program
Reviewed September 24, 2026 by The Dollars World team. How we build and check our calculators. This is general information, not financial advice.