A Big Mac In Norway is twice as expensive as in USA - The Big Mac Index

A Big Mac In Norway is twice as expensive as in USA – The Big Mac Index

by Roman on January 5, 2009

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.

  1. Tokyo, Japan – It takes 10 minutes for an average worker to earn enough money to buy a Big Mac
  2. Los Angeles, USA – 11 minutes
  3. Chicago, USA – 12 minutes
  4. Miami, USA – 12 minutes
  5. New York City, USA – 13 minutes
  6. Auckland, New Zealand – 14 minutes
  7. Sydney, Australia – 14 minutes
  8. Toronto, Canada – 14 minutes
  9. Zürich, Switzerland – 15 minutes
  10. 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

  1. Bogotá, Colombia – 97 minutes
  2. Nairobi, Kenya – 91 minutes
  3. Jakarta, Indonesia – 86 minutes
  4. Lima, Peru - 86 minutes
  5. Caracas, Venezuela – 85 minutes
  6. Mexico City, Mexico – 82 minutes
  7. Manila, Philippines – 81 minutes
  8. Mumbai, India – 70 minutes
  9. Sofia, Bulgaria – 69 minutes
  10. 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:

  1. Norway7.88 dollars for a Big Mac
  2. Sweden6.37 dollars
  3. Switzerland6.36 dollars
  4. Denmark5.95 dollars
  5. 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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{ 1 trackback }

Income equality
August 22, 2011 at 12:11 pm

{ 7 comments }

OnuJack January 6, 2009 at 9:07 am

It has been used widely yes. There are also a number of other Indexes similar to the Big Mac Index – one example is the Ipod index. Caution should be practiced when using such measures because there also other social factors that determine the price of a Big Mac. For example the popularity of junk food vs. healthy food. Also traditions of eating home vs. eating out.

If one wants to get an idea of how currencies depend on each other and what affects the competitiveness of one currency compared to another – one should look into PPP (Purchase Power Parity) theory.

Christine May 23, 2009 at 9:16 pm

I was in Oslo last summer. The capuchino is about $8 and a plain hot dog and a soda is $8.

Kjetil January 16, 2012 at 1:41 pm

It’s incredibly cheap. What the hell are you, poor?

Neferius February 12, 2012 at 6:03 pm

I Say! Poor people can be so DREADFUL!

SingaporeBoi December 7, 2009 at 11:52 pm

LOLZ in Singapore it costs $8.50 Singapore Dollars for a Mega Mac and I think Big MAc costs $5+ SIngapore Dollars. Expensive

Roman December 8, 2009 at 10:30 am

yep, its a bit more expensive than in the European Union on average.
$8.50 Singapore Dollars is 6.1 U.S. dollars

eg September 14, 2011 at 1:18 pm

On the off chance that you still follow this old post, do you know why Nairobi is listed in the “Slowest Earned” big macs? There is no McDonalds in Kenya and there has never been a McDonalds in Kenya.

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