#Big mac index history mac
And vice versa: the most expensive Big Mac you will buy in Norway (7,76 USD), Switzerland (6,83 USD) and Venezuela (6,82 USD). According to the magazine Economist survey the cheapest Big Mac you can buy in Ukraine (1,63 USD), India (1,75 USD) and South Africa (2,33 USD). The Big Mac doesn´t have in every country the same price. In which country can you buy the cheapest Big Mac? With the minumum wage 1923 EUR per month (2091 USD) one have to work only about 20 minutes to buy this sandwich.Īnd you? How many minutes do you have to work to buy the Big Mac in your country? At least that was the idea The Economist magazine had when they introduced the Big Mac Index in 1986 to convey country-by-country consumer purchasing power. It is often expressed with the phrase 'a basket of goods and services,' but to look at the theory, you need. Luxembourg is the absolute European winner. Yes, you read that right: The mighty Big Mac can tell us a lot about a countrys economy. The Big Mac Index is an index based on the theory of purchasing power parity (PPP), which states that, in the long run, currency exchange rates should move toward equalizing the price of goods and services in different countries. While many factors play a role in the pricing differential, one big one is labor. For Cheeseburgers, the variation was even greater, from 1 in places like Chicago and Houston to 2.29 in New York City. So a Czech man with a minimum wage can buy a burger for approx. Customers may pay anywhere from 3.75 for a Big Mac in Austin, Texas, to 6.39 in Seattle. Here in my country, in the Czech Republic, a minimum wage is 9.200 CZK ( Czech crowns) monthly, it is about 337 EUR (367 USD). The map below shows for how many minutes of minimum wage work one can earn the Big Mac burger.Ī man with a minimum wage has to work nearly 6 hours in India or Afghanistan in order to buy one hamburger in Portugal about 1 hour, while in Australia just 18 minutes is enough. The Big Mac was chosen for this purpose because it is sold worldwide by an identical procedure. Thanks to this index is possible to detect potential overvaluation or undervaluation of the exchange rate.
This economic indicator is based on the theory of purchasing-power parity ( PPP), according to which the identical products after the conversion exchange rate should cost the same in different countries. The index was invented by the British magazine “ The Economist” in 1986 as a guide to whether currencies are at their “correct” level. 2015īig Mac index (or hamburger index) is a price comparison of the McDonald's sandwich Big Mac in different countries. 02 Apr2015 How long do you need to work to buy the Big Mac? Written by Renata Jirasova 02 Apr.
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