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Journalism of Courage
Fast food index
Different products are priced differently in different countries. One product which is often used as an indicator of purchasing power in different countries is the Big Mac burger of global fast food chain McDonald’s. The price is also an indicator of the production cost in different countries.
For instance while the Big Mac costs $2.58 in the US, it costs just 87 cents in Indonesia. But the price for the same burger is among the highest in Venezuela at $3.38.
If one were to buy one for a quick bite in Moscow, the cost would be less than in the home country. The Economist magazine has even calculated the under and overvaluation of different currencies using its Big Mac Index.
It is based on the theory of purchasing power parity which assumes that an identical bunch of goods and services would costs the same in all countries.
