Purchasing Power Calculator
The Big Mac Index takes one burger, divides its price in two countries and calls the answer an exchange rate. There is nothing special about the burger. This does the same arithmetic with any of the 333 products we price in four or more markets.
McDonald's sells Big Mac for USD 5.29 in USA. Divide what it costs elsewhere by that figure and you get the exchange rate this one product implies. Where that sits above the real rate, the currency is dear against USA on this product; below it, cheap.
| Market | Local price | In USD | Implied rate | Actual rate | Against USD |
|---|---|---|---|---|---|
| Australia | AUD 10.95 | $7.84 | 2.0699 | 1.3959 | +48% |
| Poland | PLN 26.90 | $7.29 | 5.0851 | 3.6885 | +38% |
| Ireland | EUR 6.10 | $7.13 | 1.1531 | 0.8560 | +35% |
| New Zealand | NZD 11.90 | $7.11 | 2.2495 | 1.6725 | +34% |
| United Kingdom | GBP 4.49 | $6.12 | 0.8488 | 0.7333 | +16% |
| United Arab Emirates | AED 22.00 | $5.99 | 4.1588 | 3.6725 | +13% |
| Singapore | SGD 7.60 | $5.99 | 1.4367 | 1.2692 | +13% |
| Canada | CAD 7.59 | $5.51 | 1.4348 | 1.3763 | +4% |
| Thailand | THB 149.00 | $4.56 | 28.17 | 32.68 | -14% |
| China | CNY 26.50 | $3.93 | 5.0095 | 6.7379 | -26% |
| Indonesia | IDR 68000.00 | $3.85 | 12854.44 | 17659.14 | -27% |
| Hong Kong | HKD 27.00 | $3.44 | 5.1040 | 7.8402 | -35% |
| Malaysia | MYR 13.77 | $3.41 | 2.6030 | 4.0392 | -36% |
| Vietnam | VND 76000.00 | $2.93 | 14366.73 | 25959.19 | -45% |
| Philippines | PHP 179.00 | $2.90 | 33.84 | 61.72 | -45% |
Implied and actual rates are both expressed as units of the local currency per one USD. A positive figure in the last column means the currency buys less of this product than the exchange rate says it should, which is the sense in which the Big Mac Index calls a currency overvalued. Rates are the weekly mid-market figures behind the price index.
What this does and does not prove
This is one product, not a shopping basket, so it is a conversation starter rather than an economic measurement. A burger carries local rent, wages, beef prices, taxes and whatever the market will bear, and none of those are exchange-rate effects. The Economist has always said as much about its own index, and it applies with more force here: run the same product across a few markets and the answer moves.
The honest use is comparative. Run several products for the same pair of markets and a consistent direction across all of them is worth more than any single figure.