[zaptheimpaler]

Right.. now going back to the India/US comparison, its pretty fair to say 99% of people in India will not immigrate to the US. So the hypothetical value of saving lots of money in the US to spend in India doesn't really apply. The SF/NYC analogy does not hold exactly to US/India.

[jogjayr]

Who said anything about saving in the US to spend in India? Saving in the Bay Area to spend in rural Montana is an equally valid comparison, cost-of-living wise.

The point I was making is that some things cost the same no matter where you live. The Indian dentist who wants to take a foreign vacation, buy an iPhone, or a car needs to spend more, relative to her income, than the American dentist. Purchasing power only holds for things that are labor-bound (mainly services, and goods that are labor-intensive to manufacture) rather than resource-bound.

[zaptheimpaler]

Purchasing power is based on a basket of goods for the average consumer. It takes into account expenses like phones and cars - as you say, iPhones are still expensive but the basket would take that into account and purchasing power would be lowered accordingly.