The World by Hamburger
Rod Eime examines the relationship between Shekels and Special Sauce
You may not be particularly fond of that venerable double-decker all-beef concoction, but in a quarter of a century the world's most famous hamburger is now sold in over 25,000 restaurants in 116 countries. The product, for better or worse, is remarkably consistent in each of its international incarnations, making it a particularly useful world economic barometer.
Economists love to bandy about their own unique jargon, but when Purchasing Power Parity (PPP) is expressed as a function of fast-food, just what exactly are they getting at? Well, economists use what they call the Big Mac Index to gauge the relative value of currencies around the world, given that the two-all-beef-patty thingo is available in nearly every corner of the known world as a virtually identical product.
Picture this; you're in the travel agent's poring over wads of glitzy brochures wondering which golden beach you're going to lie on when you pipe up with, "So how much is a Big Mac in The Maldives then?" As the polite smile on your agent's face droops at the edges in tandem with a furrowing brow, she's wondering whether you graduated from Harvard or Princeton. Right? Wrong!
You relieve her obvious anxiety by qualifying your enquiry with, "Did you know that The Economist magazine uses the price of a Big Mac as a Purchasing Power Parity model for international exchange rates?" That didn't help much. You grab your hefty swatch of celloglazed propaganda and skulk off.
But seriously, knowing the price of Ronald's Pride in your intended destination will be a pretty fair indicator of just how many spondoolies you're going to need to get by.
Have a look at these relative buns: (as at Dec 2002)
Updates and corrections are appreciated. Please e-mail me
Disclamer: Of course, any economist worth his or her condiments will tell you the Big Mac Index makes numerous sweeping assumptions and almost ignores transport costs and cultural attitudes to fast food. So use the table as a guide only to be taken with a grain of you-know-what.
© Roderick Eime 2002. No reproduction permitted