What We Can Learn From a Big Mac

The Economist created the Big Mac Index in 1986 to compare the price of the Big Mac in different countries. Their goal, they said, was to make exchange rate talk more “digestible.”

Since, as a common denominator, the Big Mac is a handy way to compare currencies, let’s take a look.

The Big Mac Index

The Economist told us that the average United States Big Mac price was $6.01 in July 2025 and $6.12 during January 2026. Today it is $6.22.

With a Chinese Big Mac priced at (the equivalent of) $3.92, we can see the PPP differences. Giving us more burger for the buck, they have an undervalued currency:

Similarly, comparing the $6.22 U.S. Big Mac with Japan’s at ¥500, we see a 162.13 difference that suggests the Japanese yen is 50.4% undervalued. Meanwhile, the British and Swiss currencies are overvalued because the U.S. Big Mac costs less than the other two. In Britain, it’s £5.49 and in Switzerland, a whopping $7.30.

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 14.54% GDP share while China’s slice was 19.89%. Consequently, we could say that China ranks above the U.S. for GDP size:

My sources and more: I just realized it was time to go to the Big Mac Index for our regular look at Burger Economics. From there, we went to the IMF for their PPP  GDP map. Correspondingly, you might also enjoy (as have I) the Starbucks Index and the one from KFC that focuses on Africa.

Please note that several of today’s sections were in a past econlife post.