The Big Mac Index is an index that keeps track of hamburger prices around the world – or to be exact – it measures the prices of a Big Mac burger in McDonalds restaurants in different countries.
It was first introduced in The Economist in 1986 by Pam Woodall as an attempt of financial humor. Astonishingly the Big Mac Index quickly became one of the most talked about issues in economic circles.
What is The Big Mac Index used for?
The Big Mac Index is mainly used for 2 things:
- Comparing the amount of time that an average person must work to earn enough to buy a Big Mac (For example in Toronto it’s 14 minutes).
- Comparing currencies of different countries to determine whether the money of a certain country is overvalued or undervalued.
The Big Mac was chosen as the foundation of the index because McDonalds is found in more than 120 countries across the globe and a Big Mac consists of pretty much the same ingredients everywhere. If you buy one from New Zealand it will taste the same as one from Finland.
Top 10 places with a fastest earned Big Mac
The following are the top ten cities in the world where an average worker can earn enough money to buy a Big Mac in the smallest amount of time. Although arguable, some say that because of this, these cities have the highest standards of living in the world.
- Tokyo, Japan – It takes 10 minutes for an average worker to earn enough money to buy a Big Mac
- Los Angeles, USA – 11 minutes
- Chicago, USA – 12 minutes
- Miami, USA – 12 minutes
- New York City, USA – 13 minutes
- Auckland, New Zealand – 14 minutes
- Sydney, Australia – 14 minutes
- Toronto, Canada – 14 minutes
- Zürich, Switzerland – 15 minutes
- Dublin, Ireland – 15 minutes
Top 10 places with a slowest earned Big Mac
These are the cities where you need to work the largest amount of time in order to make enough money to buy 1 Big Mac
- Bogotá, Colombia – 97 minutes
- Nairobi, Kenya – 91 minutes
- Jakarta, Indonesia – 86 minutes
- Lima, Peru - 86 minutes
- Caracas, Venezuela – 85 minutes
- Mexico City, Mexico – 82 minutes
- Manila, Philippines – 81 minutes
- Mumbai, India – 70 minutes
- Sofia, Bulgaria – 69 minutes
- Bucharest, Romania – 69 minutes
The difference between the richest and the poorest city is almost 10 times – A person living in Tokyo will be able to buy 10 hamburgers while working the same amount of time as it takes a man in Bogotá to earn enough to afford 1 Big Mac.
5 places with the overall highest Bic Mac prices
The reason that there are only 2 cities from Europe in the top for a fastest earned Big Mac is not because the overall salaries are low (just the opposite), but because the overall prices are high compared to the rest of the world. Here are the 5 places with the highest Big Mac price:
- Norway – 7.88 dollars for a Big Mac
- Sweden – 6.37 dollars
- Switzerland – 6.36 dollars
- Denmark – 5.95 dollars
- Euro Area average – 5.34 dollars
The average price for a Big Mac in the US is 3.57 dollars. For the same price that you get 1 Big Mac in Norway you get 2 Big Macs in the US (and you’ll even have some money left).
The huge price differences in Europe and the United States is also the reason why American tourists in Europe will find their wallets thinning out pretty quickly!
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