Definition
Purchasing power
Purchasing power is what a given amount of money can actually buy. It falls when prices rise and rises when prices fall, so a salary that does not move is a pay cut in real terms.
Comparing two places or two years means comparing purchasing power, not the nominal amount of money involved.
Tools that use this term
Cost of Living Calculator
Compare two places line by line and see what the difference means for your salary.
Where Can I Live With My Salary?
Estimate what a place would cost you each month and what would be left of your salary.
Home Energy Cost Calculator
The whole energy bill of a home: what it is today, what it costs per square metre and where the money goes.