The propeller efficiency is decreased for the same reason. Power decreases because the engine does not get enough air to support an optimum combustion. In jet engines, a lesser mass of gasses is pushed out through the exhaust nozzle. When low air temperature, humidity and altitude conditions exist, the air density increases resulting in improved aerodynamic performance. The same as with pressure altitude, a uniform atmospheric conditions reference became necessary to evaluate aircraft's performance.
Density altitude is pressure altitude corrected for non-standard temperature.
Under standard atmospheric conditions, the air has a particular air density for each level of the atmosphere. The density altitude indicates how conditions in a specific airport compare to a hypothetical elevation under standard atmosphere. For example, if an airport's elevation is 150 feet MSL but density altitude computations indicate a density altitude of 2000 feet, the airplane's performance will be the same as at 2000 feet regardless of the airport elevation. High density altitude may present a serious hazard. Aircraft Performance Data Charts use both pressure and density altitude to determine aircraft's performances.