New Big Mac Index: Working Time To Buy Big Mac
THE ECONOMIST -- The size of your pay packet may be important, but so is its purchasing power. Helpfully, a UBS report published this week offers a handy guide to how long it takes a worker on the average net wage to earn the price of a Big Mac in 73 cities. Fast-food junkies are best off in Chicago, Toronto and Tokyo, where it takes a mere 12 minutes at work to afford a Big Mac. By contrast, employees must toil for over two hours to earn enough for a burger fix in Mexico City, Jakarta and Nairobi.
Originally posted at Carpe Diem.
THE ECONOMIST -- The size of your pay packet may be important, but so is its purchasing power. Helpfully, a UBS report published this week offers a handy guide to how long it takes a worker on the average net wage to earn the price of a Big Mac in 73 cities. Fast-food junkies are best off in Chicago, Toronto and Tokyo, where it takes a mere 12 minutes at work to afford a Big Mac. By contrast, employees must toil for over two hours to earn enough for a burger fix in Mexico City, Jakarta and Nairobi.
9 Comments:
I have noticed that people from Chicago tend to look a little beefy.
I like this comparison. Normally this is used to make currency exchange points. This results in a completely different sort.
However, a Coca-Cola index would be more interesting since that's a bit more typical than McDonald's. Big Macs are budget meals in the US, but at the high end of the price range for a meal in many others. Cokes are a little more common even with local foods.
Wow! Almost four hours worth of work time to buy a Big Mac in Nairobi!
Hmmm, I wonder how many Big macs this gent has had?
These numbers become distorted in countries that hold down the value of their currencies in order to foster increased exports. China being an obvious example. The net result is a higher price for imported beef and therefore a costlier Big Mac.
i have a couple of concerns about this survey. first off, what does "net" mean? is that a real after tax number? what does it take into account?
perhaps more important, this was a sampling of 14 professions. what were they? how many people in each city have them? if you include, say, lawyer, in the mix, what if there are far more lawyers (as a % of population) in chicago than nairobi?
why not just use median (or average) income in a city?
Now lets add the following two charts
1) Chart of average body fat per person
2) Chart of average health care cost per person
"These numbers become distorted in countries that hold down the value of their currencies in order to foster increased exports. China being an obvious example. The net result is a higher price for imported beef and therefore a costlier Big Mac."
As you pointed out, that supposed currency manipulation is reflected in the prices China's citizens pay for consumer goods. That's the reason for the whole exercise.
One man's Big Mac is another man's Chateau Briand. The Big Mac comparison is misleading because what is a pedestrian, fast food, junk food meal in America is actually a special, unusual, luxurious treat in many other countries and that is reflected in a premium price. Better to rely on a loaf of bread or a kilo of rice comparison.
The reason is to identify currencies where it may be possible to arb the other way and make a buck. The Chinese can be very resilient.
Post a Comment
<< Home