[Toddsterpatriot]

From your PPP link: Purchasing power parity exchange rates are useful for comparing living standards between countries.
The PPP method involves the use of standardized international dollar price weights, which are applied to the quantities of final goods and services produced in a given economy.

Let's try again. So, if the hourly wage in China is 20 cents and a Big Mac(broad based basket of goods) in China is 10 cents and the hourly wage in the US is $9.00 and a Big Mac (broad based basket of goods)is $4.50 PPP would say our economies standards of living are equal?

[Paul Ross]

From [the same] PPP link...actually that is the omnibus research site, with a number of definitions. From the one you picked, you are confusing "living" standards with comparative income standards.

This also is from that same link:

"Purchasing power parity (PPP) is a valuation-based theory that states that currency rates should be determined relative to the prices of goods in each country. Under PPP, an exchange rate is determined by comparing the prices of the same product in two different countries. PPP equilibrium values can be viewed as values toward which exchange rates should converge to over the very long term."