According to PPP or the law of prices, if you convert the price of a basket of goods in one currency to another currency, the price must be the same. But in the real world, when an identical basket of traded and non-traded goods is converted into a common currency, the price index tends to be higher in richer countries. For example, one dollar can buy more goods in Mexico than in the United States. Due to this problem, a modification model is introduced by Balassa (1964) and Samuelson (1964) which aims to modify the PPP. The Balassa Samuelson model indicates that due to low productivity of the traded goods sector in developing countries, the price of non-traded goods is lower. That is, low productivity in the tradable sector leads to cheap labor, which means that prices in the non-tradable sector are low. Furthermore, the Balassa Samuelson effect suggests that the higher the income of each capital, the higher the relative price of non-traded goods. As Kenneth (1996) mentioned in his article, the relationship between country income and prices is