7/7/2023 0 Comments What is big mac index![]() In India - which the Big Mac Index again rated as the country with the most undervalued currency ( just as it did in 2013) - their Big Mac (the Maharaja Mac) is made out of chicken, not beef, to cater to India’s Hindu majority that sees cows as holy, and not for eating. And in some countries, it’s not even the same burger. And there are different consumers, willing to pay different prices for the same burger - in some countries McDonald’s is considered an upmarket Western taste, while in other countries it’s considered downmarket junk food. ![]() There are different legal frameworks, security costs, and tax structures. In some countries ( like Iceland, which McDonald’s left in 2009) all the ingredients have to be imported in others, they are readily available. ![]() The costs of doing business in China and America (and any country) are very different: Different labor, land, raw material, and transportation costs. Does the Big Mac Index suggest they’re right? Lots of people - including former Republican presidential nominee Mitt Romney - have charged China with manipulating their currency so that it stays undervalued. This would suggest that in terms of Big Macs, the Chinese yuan was undervalued by 41 percent at that time. The example that The Economist flags is that the average price of a Big Mac in America in January 2014 was $4.62 in China it was only $2.74 at market exchange rates.
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