The Homa Files

OK, so you have to go to India …  it’s technically a Maharaja Mac, not a Big Mac … and, the cheap price is driven by relative currency values.

Still, one of my favorite price indices is the Big Mac Index … it compares the currency adjusted price of the burger across the globe.

According to Ryan Avent, chief economist at The Economist …

The Big Mac index is based on an economic theory called purchasing-power parity (PPP), which indicates that over a long enough time exchange rates should adjust so similar goods cost the same across countries.

The index reveals that, at market exchange rates, the price of the same McDonald’s  burger can vary vastly from country to country.

I’m lovin’ it ….

Source

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This entry was posted on February 9, 2013 at 8:45 am and is filed under Mktg - Pricing, Price points, Prices. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.