The Economist invented the Big Mac index in 1986 as a tongue-in-cheek guide to currency valuations. Because the well-known burger is the same throughout much of the world, the magazine thought it could be used as a measure of how over or undervalued a currency was. An overpriced burger suggests an overvalued currency and a cheap one an undervalued currency.
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As it did last year, Switzerland topped the chart this year with the world’s most expensive Big Macs. At US$ 6.59 (CHF 6.50) the Swiss price for the double layered burger far outstripped second placed Norway (US$ 5.51). In the US the triple-bunned meal cost US$ 5.04, and in the Ukraine, the cheapest place, it cost only US$1.57.What does this mean? It suggests the Swiss franc is 30.8% overvalued.
A key criticism of the index is that it ignores the higher cost of labour in richer countries. To correct for this the Economist has created an adjusted index, which calculates Big Mac prices relative to average national incomes (GDP per person). Rich countries pay workers more, so Big Macs should cost more there. After making this adjustment, Switzerland loses its top spot to Brazil where the US$ 4.78 burger overvaluesthe Brazilian Real by 54.2%. On this measure the Swiss franc is only 8.7% overvalued.
Let them eat chocolate
If this logic works for Big Macs then it ought to work for other products. Instead of Big Macs we looked at a Swiss branded product: Lindt chocolate.
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A 100g bar of Lindt Excellence chocolate with 70% cocoa costs US$ 2.92 at Walmart in New York – US$ 2.68 + sales tax. At Coop in Switzerland the same bar costsUS$ 2.89 (CHF 2.85). On a raw measure, chocolate pricessuggestSwitzerland’s currency is1.1% undervalued, a far cry from the 30.8% over valuation suggested by the unadjusted Big Mac index.
If we look atthe price of the same Swiss chocolate inanother country, Hong Kong, the shift is even more dramatic. The unadjusted Big Mac index suggests Hong Kong’s currency is 50.9% undervalued. When using chocolate, its currency shifts from appearing 50.9% undervalued to 58.6% overvalued.The same bar in Hong Kong costs US$ 4.64 (HK$ 35.90) at the Wellcome and ParknShop supermarkets.
It seems value is hard to measure. High quality chocolate, an everyday product in Switzerland, is a luxury in Hong Kong. And in Hong Kong, Big Macs have to compete with a lot of very tasty local fast food.
The relative value ofproducts often requires more than a comparison of sometimesincomparable local prices. Context also matters. The same could probably be said of currencies.
More on this:
The Big Mac index (The Economist website – in English)
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FAQs
Big Mac index worldwide 2024
At 8.17 U.S. dollars, Switzerland has the most expensive Big Macs in the world, according to the January 2024 Big Mac index. Concurrently the cost of a Big Mac was 5.69 dollars in the U.S., and 5.87 U.S. dollars in the Euro area.
What country has the most expensive Big Mac? ›
Introduction
- Switzerland topped the Big Mac Index with a score of 30.33%, leading it to be the most "expensive" country.
- In contrast, Venezuela sits at the bottom of the list at -65.77%. ...
- Countries like the United States, Canada, and Lebanon are at the median, with respective scores of 0%, 1.97%, and -1.40%.
Combining a solid chocolate manufacturing sector and a deep-rooted cultural appreciation for this sweet treat culminates in Switzerland's leading position in chocolate consumption per capita.
Where is the cheapest Big Mac in the world? ›
The ten countries with the lowest Big Mac Index are Turkey, Hungary, Taiwan, Malaysia, Egypt, India, Indonesia, South Africa, Romania, and Venezuela. In Venezuela, the cost of a Big Mac is just $1.76, a reflection of the nation's ongoing hyperinflation and currency devaluation.
Why is McDonald's in Switzerland so expensive? ›
Why is McDonald's more expensive in Switzerland? McDonald's in Switzerland features some unique menu items that you can't get in the United States, such as the Quinoa Curry, the Steakhouse Classic, and the Toblerone McFlurry.
What is the average salary in Switzerland? ›
Summary table : Average and minimum salaries in Switzerland per month in 2024
| Category | Amount in CHF | Amount in USD (approx.) |
|---|
| Average Gross Monthly Salary | CHF 6,665 | USD 7,439 |
| - Average for Women | CHF 6,211 | USD 6,935 |
| - Average for Men | CHF 6,963 | USD 7,776 |
| Geneva Minimum Wage (Gross) | CHF 4,426 | USD 4,940 |
1 more rowFeb 13, 2024
Liechtenstein and Switzerland share the world's most expensive Big Mac ($7.75) and Happy Meal ($8.17). The world's most expensive McDonald's item is the Triple Cheddar & Double Beef in France ($15.70). Hawaii is the U.S. state where McDonald's is the most expensive, and Mississippi is the cheapest.
How much is a Big Mac meal in New York? ›
In New York City, the same combo of Big Mac, medium fries and medium soda costs $13.89 on DoorDash before any fees or delivery charges — or $17.79 if you swap the soda for a shake.
What state has the most expensive Big Mac meal? ›
A map, by Pantry & Larder, shows the cost of a Big Mac at each McDonald's in the United States, as of early 2023. As you might expect, the prices are higher on the east and west coasts. The most expensive Big Mac was in Lee, Massachusetts for $8.09.
What is Switzerland famous for? ›
Switzerland is famous for its mountains, clocks and its food – especially cheese and chocolates. It's a fantastic place for winter sports. The British Royals love to snowboard in Klosters while skiing in Zermatt gives you fantastic views of the iconic Matterhorn mountain.
Switzerland is the country that is responsible for the most amount of chocolate consumed per capita. Even though there are certainly countries across the globe that consume more total chocolate than Switzerland, Switzerland consumes the most chocolate per person.
What chocolate is Switzerland famous for? ›
Switzerland is particularly renowned for its milk chocolate, the most consumed type of chocolate. In 1875, a Swiss confectioner, Daniel Peter, developed the first solid milk chocolate using condensed milk, which had been invented by Henri Nestlé, who was Peter's neighbour in Vevey.
How much is a Big Mac in Hawaii? ›
The most expensive Big Mac in the United States can be found in Hawaii, where it will run you $5.31 — a long way from its 1967 debut price of 45 cents. The cheapest, meanwhile, will require a road trip down to Mississippi where they sell for a comparatively cheap $3.91.
Is a Big Mac meal really $18? ›
So, we should pay attention when Americans get all hot and bothered about the rising cost of eating our favorite dish at their favorite place. An image from a Darien, Connecticut, McDonald's rest stop last July went viral because it showed that a Big Mac combo meal was priced at $18.
Is McDonald's expensive in Switzerland? ›
But of all the golden arches in the world, Switzerland sports the highest prices, as Business Insider has previously reported. It makes sense. After all, Switzerland is widely considered the most expensive country in Europe.
How much is a McDonald's meal in Switzerland? ›
Latest McDonald's Switzerland Menu Prices
Some examples: The Homestyle Crispy Chicken Honey Mustard costs CHF 9.10. The McChicken and McVeggie are available at CHF 6.50 for a single item and CHF 12.30 for a meal. And you can buy a classic Hamburger for CHF 2.80.
What is expensive in Switzerland? ›
Cosmetics and clothing are also quite more expensive in Switzerland than in the rest of Europe. Shoes and toys are also a little bit more expensive. Now, all of these results are based on average prices. If you look for it, you can find cheap clothes in Switzerland, for instance.
How much is food in Switzerland? ›
Monthly supermarket bills vary widely depending on the household size and preferred brands, though food in Switzerland can be expected to be around 20–30% higher than other European cities, with prices being highest in Zurich and Basel. Residents should budget around CHF 400–650 per month per person.
