A Return To All Things Digital Salad

It’s been a little while since my last post, which I can only apologise for. Life has been busy! Not only that, but there hasn’t been all that much cheerful to write about since my last post poking fun at the British government’s fascination for shufflin’. It feels a little like we’re on the edge of oblivion when it comes to the news at the moment, so its about time I found something a little bit more lighthearted out there in the news.

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Today I’m going to look into Burger-nomics. I’m not making that up; honest.

The Economist came up with the idea of comparing the price of McDonald’s Big Mac Burger across the world as a fun way to illustrate international economic exchanges back in 1986. Little could they have know that it would actually begin to gain ground as an academically accepted measurement in economics.

Understandably, considering the Big Mac Index was an idea conjured up as a joke, there are a few problems with it. Around the world the McDonald’s menu changes, so its difficult to compare the Big Mac price when it isn’t always the key product in a country. For instance, in India, you will find a McSpicy Chicken-Mac rather than a Big Mac. But hey, its an interesting idea that gives some interesting results!

mcdonalds-big-mac-chemicals

The big news is that they’ve updated the index this week to take account of Purchasing Power-Parity (PPP), an economic theory that essentially tries to iron out the imbalances. Of course a Big Mac will be cheaper in Mexico, it doesn’t have the same kind of economic development as the US, PPP theorists would say – so take account of that in the figures.

The new and swanky PPP figures show that Brazil is the most expensive place to buy a Big Mac (sorry World Cup fans, you were swindled!).

The cheapest place is Hong Kong, where 19 HK dollars (usually exchanging for less than 2.5 US dollars) will get you a Big Mac.

One thing to worry President Putin, currently riding high on record-high approval ratings from the Russian people with his strong-man antics over Ukraine is that Russia’s Big Mac is undervalued by 21%.

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Whilst that could indicate the Russian economy was growing rapidly and international investors were full of confidence, it looks like the next figures for Russia are going to be showing the price of their Big Mac going up. International sanctions, and a huge dip in their stock market, will be hitting their economy hard – so perhaps Putin soon won’t be able to get those Big Macs he must love to have before wrestling bears.

japanese-mcdonalds-o

That GIF above is how Japan advertises McDonald’s, would you believe. With the price of their Big Mac coming in at 20% under what the US pay, combined with fairly strong growth figures in their economy, it’s probably a good time to move to Japan.

So that’s a quick introduction to  Burger-nomics. It’s safe to say its not the best measure of a country’s economy, but its a fascinating insight into the world and its currencies.

This topic has had me exhaust any vaguely burger related GIF on the internet and has also been somewhat ironic to be talking about burgers on a blog with salad in the name, but there you go!

 

Digital Salad – lifeasadigitalsalad.wordpress.com

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