At **** U.S. dollars, Switzerland has the most expensive Big Macs in the world, according to the January 2025 Big Mac index. Concurrently, the cost of a Big Mac was **** dollars in the U.S., and **** U.S. dollars in the Euro area. What is the Big Mac index? The Big Mac index, published by The Economist, is a novel way of measuring whether the market exchange rates for different countries’ currencies are overvalued or undervalued. It does this by measuring each currency against a common standard – the Big Mac hamburger sold by McDonald’s restaurants all over the world. Twice a year the Economist converts the average national price of a Big Mac into U.S. dollars using the exchange rate at that point in time. As a Big Mac is a completely standardized product across the world, the argument goes that it should have the same relative cost in every country. Differences in the cost of a Big Mac expressed as U.S. dollars therefore reflect differences in the purchasing power of each currency. Is the Big Mac index a good measure of purchasing power parity? Purchasing power parity (PPP) is the idea that items should cost the same in different countries, based on the exchange rate at that time. This relationship does not hold in practice. Factors like tax rates, wage regulations, whether components need to be imported, and the level of market competition all contribute to price variations between countries. The Big Mac index does measure this basic point – that one U.S. dollar can buy more in some countries than others. There are more accurate ways to measure differences in PPP though, which convert a larger range of products into their dollar price. Adjusting for PPP can have a massive effect on how we understand a country’s economy. The country with the largest GDP adjusted for PPP is China, but when looking at the unadjusted GDP of different countries, the U.S. has the largest economy.

The theory of purchasing power parity (PPP) has long been a staple of international economic analysis. Recent years have seen the rise in popularity of a tongue-in-cheek, fastfood version of PPP: The Big Mac index. In this article, Michael Pakko and Patricia Pollard describe how comparisons of Big Mac prices around the world contain the ingredients necessary to demonstrate the fundamental principles of PPP. They show that the Big Mac index does nearly as well as more comprehensive measures of international price comparisons and that deviations from "McParity" illustrate why PPP often appears not to hold as a practical matter.

Discussion of purchasing power parity (PPP) using the price of the McDonald's Big Mac sandwich.

The so-called Big Mac index is regarded as an indicator for the purchasing power of an economy. The average price for a Big Mac burger in Mexico was estimated at 4.6 U.S. dollars in January 2025. Due to the high increases during the last few years, the Big Mac burger price became one of the highest in Latin America. Big Mac Index The Bic Mac index has been published annually by The Economist since 1986 and is rated as a simplified indicator of a country’s individual purchasing power. As many countries have different currencies, the standardized Big Mac prices are calculated by converting the average national Big Mac prices with the latest exchange rate to U.S. dollars.The Big Mac, as the top-selling McDonald’s burger, is used for comparison because it is available in almost every country and manufactured in a standardized size, composition and quality. McDonald’s is a worldwide operating fast food restaurant chain with headquarters in Oak Brook, Illinois. In Latin America, McDonald's largest franchisee is Arcos Dorados Holdings, with headquarters in Montevideo, Uruguay. Power Purchasing Parity This conversion endeavor seeks to level the purchasing power disparities among nations by neutralizing price discrepancies. Notably, in Mexico, the Purchasing Power Parity (PPP) has demonstrated a consistent upward trajectory, yielding positive repercussions on the minimum wage for the labor force. This, in turn, has triggered a favorable effect on the affordability of the essential food basket. Furthermore, this upswing has propelled five major Mexican cities into the upper positions of PPP rankings within Latin America. Consequently, Mexico now stands as the 15th largest global economy, a status achieved despite a slight, yet steady, decline in its share of the global GDP, which is adjusted according to PPP metrics.

Our source data are from several places. Big Mac prices are from McDonald’s directly and from reporting around the world; exchange rates are from Thomson Reuters; GDP and population data used to calculate the euro area averages are from Eurostat and GDP per person data are from the IMF World Economic Outlook reports.

The Big Mac Index is published by The Economist as an informal way of measuring the purchasing power parity (PPP) between two currencies and provides a test of the extent to which market exchange rates result in goods costing the same in different countries. It "seeks to make exchange-rate theory a bit more digestible."

The Big Mac PPP exchange rate between two countries is obtained by dividing the price of a Big Mac in one country (in its currency) by the price of a Big Mac in another country (in its currency). This value is then compared with the actual exchange rate; if it is lower, then the first currency is under-valued (according to PPP theory) compared with the second, and conversely, if it is higher, then the first currency is over-valued.

Compare countries by seeing how long person has to work for to buy a big mac: https://www.economist.com/news/2020/07/15/the-big-mac-index

https://en.wikipedia.org/wiki/Big_Mac_Index

This statistic shows the average working time required to buy one Big Mac in selected cities around the world in 2018. In Nairobi, the average worker had to work for about ***** minutes to be able to purchase a Big Mac. The average wages garnered in select countries around the world based on purchasing power can be accessed here. Additional information on the Big Mac Index The Big Mac index is a tongue-in-cheek measure of purchasing power parity (PPP) created by The Economist. The index gained global attention among economists and other analysts of global economic conditions due to its relative degree of accuracy in predicting purchasing power parity among countries. In attempting to include wage differentials rankings that seek to measure how fast one can earn the money required to purchase a Big Mac incorporate average wages. In theory, the result should correlate to the ranking of average world wages adjusted for PPP. The Big Mac index is open to criticism as it is unable to take certain factors that may result in the price of a Big Mac fluctuating between countries. For example, the hospitality industry, including McDonalds, tends to employ large numbers of people on or close to the minimum wage. This is shown by the percentage of workers paid hourly rates with earnings at or below the minimum wage in the U.S., by industry. As a result differing levels of the minimum wage may lead McDonalds to charge a comparably higher amount for a Big Mac in that country.

In January 2025, the price of a McDonald's Big Mac sandwich in Israel stood at **** U.S. dollars. By comparison, the price of a Big Mac in the Euro Area stood at **** U.S. dollars, and **** U.S. dollars in the United States. The Big Mac index is regarded as an indicator for the purchasing power parity (PPP) of global currencies. Since 2010, the price of Big Macs in Israel, as expressed in U.S. dollars, has trended upwards.

In 2023, the United States accounted for 15.56 percent of global gross domestic product (GDP) after adjusting for purchasing power parity (PPP). This share was expected to decrease to 14.72 percent by 2029, which is roughly a seventh of the global total. What is PPP? The easiest way to understand purchasing power parity is the Big Mac Index, a measure developed by The Economist. The index tracks the price of the McDonald’s Big Mac burger, sold at each of its thousands of restaurants worldwide. Countries where the Big Mac is most expensive have higher purchasing power, meaning one can buy more for each unit of that currency. To calculate PPP, economists use a group of goods to calculate the ratio of the price of this group in each country. This ratio is then used to convert all countries into a standardized price level, on parity with each other. Why use PPP? A U.S. dollar in the United States does not have the same purchasing power as a dollar in China, even after considering the exchange rate. For this reason, adjusting for PPP gives an idea of what the rest of the world could buy in the United States, if prices were the same as in their home country. However, some economists argue that using PPP for comparisons between countries is inaccurate because it changes the price level differently for each country. Still, because it accounts not only for country-specific effects but also inflation and exchange rate fluctuations, PPP is a very popular metric.

In January 2025, it was estimated that a Big Mac burger in Argentina would cost an average of 6.95 U.S. dollars. Overall, Argentina ranked with the highest price for a Big Mac in selected Latin American countries. The Big Mac Index in Argentina The Big Mac Index is an indicator that measures an economy's purchasing power. As it is mainly a standardized product, elaborated similarly across many markets, the evolution of its cost can provide insights into variations of real consumption prices in a given country. For instance, the price for a Big Mac in Argentina decreased by almost half from 2018 to 2019. This reflects Argentina's peso devaluation in comparison to the U.S. dollar and other foreign currencies in that period, caused by high inflation rates in the country, among other macroeconomic reasons. McDonald's in Latin America Arcos Dorados Holdings Inc. is McDonald's franchisee in Latin America. The company's name was inspired by McDonald's famous logo, as 'Arcos Dorados' means 'Golden Arches' in Spanish. It manages the brand's operations in Mexico, Central America, the Caribbean, and South America. Arcos Dorados’ revenue averages three billion U.S. dollars per year, making it McDonald's largest franchisee in the world. The company is also publicly listed in the New York Stock Exchange. Based on its market capitalization value, Arcos Dorados' net worth was estimated at around 1.64 billion U.S. dollars in 2023.

India’s share of global gross domestic product (GDP) rose to 8.25 percent in 2024 when adjusted for purchasing power parity (PPP) and was projected to increase to 10 percent by 2030. This reflects the growth of India’s economy, which is helped in this ranking by the low purchasing power of the rupee. The Indian economy A significant portion of India’s economic growth comes from a shift in the workforce from the agricultural sector to the more-productive service sector. This labor force shift is particularly significant in India because of the country’s staggering population figures. As such, changes in the Indian economy have an impact on a significant portion of the world population. What does PPP mean? The Economist magazine uses the Big Mac Index to illustrate purchasing power. Since the product should be the same in every country that has a McDonalds, the Big Mac’s price should reflect the purchasing power of each local currency. For the calculation in this statistic, economists took the prices of several standard goods (though not the Big Mac) and put them at the same level based on their prices in the local currency. Thus, the power of these currencies to purchase was put on par across countries, giving purchasing power parity. As such, this statistic can be interpreted as the relative size of the Indian economy if the whole world used the Indian rupee price levels.

In 2024, the gross domestic product (GDP) of China amounted to around 18.7 trillion U.S. dollars. In comparison to the GDP of the other BRIC countries India, Russia and Brazil, China came first that year and second in the world GDP ranking. The stagnation of China's GDP in U.S. dollar terms in 2022 and 2023 was mainly due to the appreciation of the U.S. dollar. China's real GDP growth was 3.1 percent in 2022 and 5.4 percent in 2023. In 2024, per capita GDP in China reached around 13,300 U.S. dollars. Economic performance in China Gross domestic product (GDP) is a primary economic indicator. It measures the total value of all goods and services produced in an economy over a certain time period. China's economy used to grow quickly in the past, but the growth rate of China’s real GDP gradually slowed down in recent years, and year-on-year GDP growth is forecasted to range at only around four percent in the years after 2024. Since 2010, China has been the world’s second-largest economy, surpassing Japan.China’s emergence in the world’s economy has a lot to do with its status as the ‘world’s factory’. Since 2013, China is the largest export country in the world. Some argue that it is partly due to the undervalued Chinese currency. The Big Mac Index, a simplified and informal way to measure the purchasing power parity between different currencies, indicates that the Chinese currency yuan was roughly undervalued by 38 percent in 2024. GDP development Although the impressive economic development in China has led millions of people out of poverty, China is still not in the league of industrialized countries on the per capita basis. To name one example, the U.S. per capita economic output was more than six times as large as in China in 2024. Meanwhile, the Chinese society faces increased income disparities. The Gini coefficient of China, a widely used indicator of economic inequality, has been larger than 0.45 over the last decade, whereas 0.40 is the warning level for social unrest.

In 2024, McDonald's brand value amounted to ***** billion U.S. dollars, up from *** billion dollars a year earlier – an annual increase of ** percent. The Golden Arches McDonald's started its business as a barbecue restaurant in San Bernardino, California, in 1940. Throughout the years, the company transformed into the leading fast-food franchise with the famous Golden Arches logo. As of May 2023, McDonald's ranked among the largest companies worldwide by market capitalization. Furthermore, the food behemoth was the highest-valued quick-service restaurant chain in the world by a wide margin in 2023, beating competitors such as Starbucks, KFC, and Burger King. More than a hamburger McDonald's operates in over 100 countries and produces its most famous hamburger, the Big Mac. This fact provides an informal measure of purchasing power parity between countries – namely the Big Mac Index, introduced by The Economist in 1986. According to the index, Switzerland had the most expensive Big Macs worldwide at **** dollars as of January 2023. Norway and Uruguay followed at **** dollars and **** dollars, respectively.