The 2016 Big Mac Index has just been published by the Economist.
The Big Mac Index allows to gauge the cost of living in different countries by comparing the price of a Big Mac. The advantage of using this product as a reference point is that McDonald’s offers Big Macs virtually in all countries and in most locations the burger is made using local ingredients and served by local staff, which allows to minimize the effects of transportation cost, import tariffs, and other external factors.
The chart below provides a comparison of how much a Big Mac costs in different countries, as of January 6, 2016 exchange rates.
Key observations:
- As before, Switzerland, Sweden, and Norway remain the most expensive countries with the cost of living (price of Big Mac) up to 50% higher than in the U.S. However, the economic crisis in Europe in general, moved the cost of living in these countries much closer to that of the U.S. Norway, whose currency has been hit hard by the falling oil prices, shows the greatest drop in this group.
- Likewise, Venezuela has been hit hardest by the falling oil prices. From a country with one of the highest Big Mac prices in 2014 it moved to the very bottom of the list in 2016. *Nota de La Colmena: En la gráfica The Economist escribe haber utilizado la tasa SIMADI, la cual al día de hoy es de 199,73 Bs/$ (http://noticiaaldia.com/2016/02/tasa-simadi-cerro-este-miercoles-en-19973-bolivares-por-dolar/) lo cual coloca el precio de un Big Mac en Venezuela en 0.66$=131.82 Bs. Ese dato es falso, un BigMac en Venezuela está en el orden de los 500-600 Bs, es decir, The Economist no está utilizando la tasa SIMADI sino la de DolarToday. Esta discrepancia de criterios hace que en Venezuela hayamos pasado del BigMac más caro del mundo al más barato. Poca seriedad en los conceptos. Bueno, entre The Economist y DolarToday parece no haber mucha diferencia.
- In just about any country, a Big Mac costs less in 2016 than what it cost a year ago. The only country where the price went slightly up is India. This is a result of both the weakening global economy, but more importantly of strengthening of the U.S. dollar and thus a drop in the Big Mac price in the dollar equivalent.
