Purchasing-power parity is an approximation, it doesn't take into account the fact that relative prices can be very different depending on the country. E.g., suppose day labourers get paid $15 an hour in developed country X, but only $1.5/h in India. In general you cannot extrapolate that heavy machinery that costs $15000 a week in X will cost only $1500 in India.
Comments
Purchasing-power parity is an approximation, it doesn't take into account the fact that relative prices can be very different depending on the country. E.g., suppose day labourers get paid $15 an hour in developed country X, but only $1.5/h in India. In general you cannot extrapolate that heavy machinery that costs $15000 a week in X will cost only $1500 in India.