Parity Index Adjusts For Exchange Rate Swings

Description:
The Faithful & Gould Parity Index is designed to clarify the international cost picture, which can be distorted by gyrations in currency exchange rates. The index is based on put-in-place rates for 26 basic items used in the construction of a manufacturing facility. The parity index value in the table shows construction costs at each location relative to Chicago. A parity of 0.78 for Great Britain implies that £0.78 of construction is equivalent to $1 of work in Chicago. To calculate a relative index value, divide the parity value of the exchange rate and multiply by 100. In this study, the U.S. dollar is used as the exchange rate for Russia.

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