What is a pricing index?
Last updated
Last updated
The Pricing Index is a system that adjusts prices across countries based on purchasing power, using USD as the standard. It assigns a price multiplier to each country to reflect local economic conditions. For instance:
If India’s Pricing Index is 0.5, an item priced at $10 in the U.S. would cost $5 in India. After converting to the local currency, this would amount to approximately INR 425 (assuming an exchange rate of $1 = INR 85).
Similarly, if a country’s Pricing Index is 1.2, the same item would cost $12 in that country.
This approach ensures pricing is equitable and aligned with the local buying power, making it especially useful for global digital products, apps, and services. This approach of adjusting pricing based on each country's economic level can potentially lead to up to a 30% increase in revenue.
The most widely used pricing index is Purchasing Power Parity (PPP). To explore the various indexes we support, visit the Pricing Index tab.
