The Big Mac Index Compares Purchasing Power Between Countries
Rebecca Byers — January 22, 2012 — Art & Design
References: onlinemba & holykaw.alltop
The Big Mac Index is a system of determining the value of two currencies by comparing the price of a Big Mac from McDonald's in either country, and has been visualized in this infographic by OnlineMBA.com, a site dedicated to providing resources to students pursuing their MBA online. Also known as "burgernomics," the concept was introduced in 1986 by The Economist magazine and is a way of measuring purchasing power.
The most expensive place to purchase a Big Mac is in Norway, at $7.20, while the cheapest is in Ukraine, at $1.84. According to the Big Mac Index, "most emerging-market currencies are significantly undervalued," and the infographic also includes an alternative index that calculates the amount of time the average worker in a certain country would need to work in order to afford a Big Mac.
The most expensive place to purchase a Big Mac is in Norway, at $7.20, while the cheapest is in Ukraine, at $1.84. According to the Big Mac Index, "most emerging-market currencies are significantly undervalued," and the infographic also includes an alternative index that calculates the amount of time the average worker in a certain country would need to work in order to afford a Big Mac.
Trend Themes
1. Big Mac Index - Leveraging the Big Mac Index to compare purchasing power between countries presents opportunities for businesses to identify potential markets for expansion.
2. Burgernomics - The concept of measuring purchasing power through the price of a Big Mac opens up possibilities for innovative pricing strategies in the food industry.
3. Alternative Index - Exploring alternative indices, like the time it takes an average worker to afford a Big Mac, can lead to disruptive innovations in understanding income disparities and affordability.
Industry Implications
1. Fast Food - The Fast Food industry can leverage the Big Mac Index to identify potential expansion opportunities in countries with undervalued currencies.
2. Finance - The Finance industry can utilize the Big Mac Index as a tool for assessing economic conditions and making investment decisions.
3. Market Research - Market research companies can explore alternative indices, like the one measuring affordability based on average worker wages, to provide valuable insights into income disparities and consumer behavior.
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