You and your Five Guys-obsessed friends may not be eating them, but someone out there is still interested in Big Macs. And no, we’re not talking about our favourite, pizza-customising Canadian chef.
Since 1986, The Economist has been releasing its “Big Mac index,” a currency comparison tool based on the theory of purchasing-power parity (PPP).
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PPP compares the value in US Dollars of identical consumer goods across the world as a way to figure out countries’ total income, while taking into account cost of living and inflation differences.
In The Economist‘s report, that consumer good is the Big Mac. Released this week, the 2017 Big Mac index lists the cost of the signature McDonald’s burger in 48 countries and shows whether their currency is under or overvalued, according to PPP.
As well as being (in the authors’ words) a “lighthearted” “tool to make exchange rate theory more digestible,” the Big Mac index also serves as a handy guide for anyone wishing to choose their next holiday destination based on cheap burgers.
Stingy Maccy D fans take note: Switzerland has the priciest Big Macs in the world. As The Local explains, using the US Dollar as a base rate, The Economist index shows that a burger in Switzerland is $6.35, compared to $5.06 in the US. This means that the Swiss Franc is overvalued by 25.5 percent.
The second most pricey Big Macs are found in Norway, then Sweden, Venezuela, and Brazil. The US came in as sixth most expensive and Britain at 16, which the index says shows that the British pound is undervalued by 26.3 percent. In a version of the Big Mac index that takes into account labour costs and GDP, however, the list changes, with Brazil and Pakistan coming out as most expensive.
Who said economics can’t be tasty?
