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Now, in addition to the Big Mac Index, we can compare soup dumplings:
The Taiwan Din tai Fung restaurant chain has arrived in NYC. It tells us that the world’s most expensive cities are London, Las Vegas, and New York.
Burger Economics
Big Mac Prices
According to McDonald’s menus, a Big Mac would have cost us approximately 45 cents during the 1960s. Hopscotching among decades, we have the 1970s Big Mac at 65 cents and then $1.60 during the 1980s. I am guessing that the leap was because of the last great inflation during the early 1980s.
Through its twice-yearly Big Mac Index, The Economist lets us compare currencies through Big Mac prices. In its July report, The Economist tells us that the average Big Mac price was $5.69. Comparing below, you can see that we will pay a whopping $8.07 for a Big Mac in Switzerland because the Swiss Franc is overvalued by 41.8 percent.
Top 10 Most Expensive Big Macs:
But, if you wanted to know (as did I) the actual burger price, Statista had the clearest list:
Our Bottom Line: Purchasing Power Parity
When we compare economies, it can be helpful to recognize PPP (purchasing power parity) differences. Oversimplifying a bit, PPP is just a comparison of how much a basic currency unit can buy. We know that the U.S. has the world’s biggest GDP. However, through a PPP lens, China’s is larger because of their lower prices. In other words, although GDP totals are less, they can represent more purchasing power.
Using IMF PPP numbers, we see that the United States produced a 15.5% GDP share while China’s slice was 19.01%: Consequently, we could say that China ranks above the U.S. for GDP size:
With a Chinese Big Mac priced at (the equivalent of) $3.57, we can see the PPP differences. Giving us more burger for the buck, they have an undervalued currency:
My sources and more: I just realized it was time to go to the Big Mac Index for our twice-yearly look at Burger Economics. From there, Axios provided more insight. Please note that today’s “Bottom Line” quotes a previous econlife post.
