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Using PPI to estimate service affordability

Mary Pat McVay
• Opportunity International
• United States
• 03/16/20

Hi. I am wondering about whether PPI data can be used to estimate affordability of some services that are valued in today's local currency.  We are specifically looking at school affordability.  Is it technically valid to use the $1.90/day poverty level to estimate the affordability of school costs? Can one multiple ($1.9/day x # of days/year x average household size) to calculate a household poverty level in USD, then use today's exchange rate to convert annual local education costs to USD, and then compare the two - one would arrive at a statement like: the annual cost of education for a 6 person family with 4 children in school is 25% of the income of a fmaily living in extreme poverty.

It is my understanding that one cannot make these kinds of calculations with the poverty line value of $1.90/day or $2.50/day because these do not represent today's $ value - rather, they represent purchase power parity in a fixed year. Is there a way to adjust for year and convert to current values?