Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Big Mac index: Our interactive currency comparison tool

economist.com

Post reply on HN
Print view View original

51–60 of 192 posts

Re: The Big Mac index: Our interactive currency comparison tool

#51

Post by bryanrasmussen »

greedo wrote: post #38
moffkalast wrote: post #20

Earlier quoted context omitted.

I think there's more to consider here too that makes it irrelevant in terms of currency comparison. Usually cheap stuff like bread is notoriously expensive in Switzerland for example, I'd assume because the price of labour is that high. As such the cost of making a big mac there is also more expensive, buying power is higher, so to meet demand and recoup labour costs the end prices are higher. Same for the other extr…

Big Macs in Denmark are roughly the same price as in the US, but in Denmark you'd make $22/hour...

and pay higher taxes.

Re: The Big Mac index: Our interactive currency comparison tool

#52

Post by eertami »

intrasight wrote: post #40
mohanmcgeek wrote: post #37

The original idea used to be that you could use the price of big Mac instead of comparing every aspect of consumer spend to calculate PPP. But clearly that isn't working anymore. Indian PPP rate which tech companies use to adjust pay is around 17-20 INR/USD. But this chart implies that the number is close to 35 INR/USD The numbers from numbeo which uses all the aspects of consumer spend gets a ratio closer to the one…

They didn't choose "burgers" - they choose something that's largely the same across the world. A Big Mac was what they choose. It's certainly not intended as a policy tool or a pay adjustment tool. But it is an interesting metric non the less.

I think the biggest flaw is that the Big Mac you are served in Switzerland is not really the same Big Mac you are served in the US.

It's a cute form of comparison but indeed should not be used as a policy tool.

Re: The Big Mac index: Our interactive currency comparison tool

#53

Post by bryanrasmussen »

moffkalast wrote: post #20
petercooper wrote: post #14

I don't see how this really works any more because a Big Mac is different in different countries. It's not an "identical" product being compared. You can use McDonald's own local nutrition calculators to confirm this. A Big Mac in the US is 550 calories, yet 508 calories in the UK (522 in Russia and a mere 498 in Switzerland, for comparison). Is it factored into the index that British fast food fans are getting 7.6%…

I think there's more to consider here too that makes it irrelevant in terms of currency comparison. Usually cheap stuff like bread is notoriously expensive in Switzerland for example, I'd assume because the price of labour is that high. As such the cost of making a big mac there is also more expensive, buying power is higher, so to meet demand and recoup labour costs the end prices are higher. Same for the other extr…

>Usually cheap stuff like bread is notoriously expensive in Switzerland for example,

maybe ingredient quality in some places might be legally mandated, increasing price (I know everyone gets the same, but not if the law says different) basically the thing I'm thinking of is an article about a year ago where some sort of white bread was declared legally not bread but a form of cake by some EU country - can't remember but a similar ruling could affect bun quality in various countries.

Re: The Big Mac index: Our interactive currency comparison tool

#54

Post by adventured »

JohnJamesRambo wrote: post #27

Thought it was going to be this one, which I enjoy using a lot and find useful for getting the big picture. https://inflationchart.com/cpi-in-bigmac https://inflationchart.com/spx-in-bigmac In the 70s you could work minimum wage for an hour and afford three Big Macs. Now you have to work almost an hour to afford one Big Mac.: https://inflationchart.com/minwage-in-bigmac

What percentage of the labor force earned the minimum wage in the 1970s versus today?

Today it's less than 1%.

More realistically the new minimum wage in the US is ~$13-$15 per hour, which you can earn from Walmart, Target, Amazon, Walgreens, CVS, Best Buy and most of the rest. They can't get enough labor and will hire almost anyone that walks in the door.

These days you can trivially earn $13-$15 / hour to start, working at popular convenience stores like Sheetz, Wawa and numerous others like them.

Skills required? The ability to talk to people normally, show up to work and scan bar codes.

Re: The Big Mac index: Our interactive currency comparison tool

#55

Post by long_time_gone »

greedo wrote: post #38
moffkalast wrote: post #20

Earlier quoted context omitted.

I think there's more to consider here too that makes it irrelevant in terms of currency comparison. Usually cheap stuff like bread is notoriously expensive in Switzerland for example, I'd assume because the price of labour is that high. As such the cost of making a big mac there is also more expensive, buying power is higher, so to meet demand and recoup labour costs the end prices are higher. Same for the other extr…

Big Macs in Denmark are roughly the same price as in the US, but in Denmark you'd make $22/hour...

It's not quite that simple. The US Big Mac [1] has 11% more calories than the Denmark Big Mac [2], which is an 11% difference. Also, the average hourly wage in the US is $31.63 [3] as of January 31st.

[1] https://www.mcdonalds.com/us/en-us/product/big-mac.html [2] https://www.myfitnesspal.com/food/calories/mcdonalds-big-mac... [3] https://www.bls.gov/news.release/empsit.b.htm

Re: The Big Mac index: Our interactive currency comparison tool

#56

Post by sgt »

throwaway4good wrote: post #46

Something crazy is going on - compare 2022 with 2012. I remember going to the US and thinking it was cheap.

Last time I was in the US was in 2014, and I recall it was pretty cheap to eat out. Not surprised if costs went up drastically since then.

I travelled from South Africa to Chattanogga to have my very first American BigMac, and it was delicious! I was probably just very hungry, though. ;-)

Re: The Big Mac index: Our interactive currency comparison tool

#57

Post by chucksta »

eertami wrote: post #52
intrasight wrote: post #40

Earlier quoted context omitted.

They didn't choose "burgers" - they choose something that's largely the same across the world. A Big Mac was what they choose. It's certainly not intended as a policy tool or a pay adjustment tool. But it is an interesting metric non the less.

I think the biggest flaw is that the Big Mac you are served in Switzerland is not really the same Big Mac you are served in the US. It's a cute form of comparison but indeed should not be used as a policy tool.

I actually eat McD's specifically at least once while traveling internationally to see how much it changes. Anecdotal but its been my experience the core items taste and appear strikingly similar everywhere, and that's ~10 data points across the world.

Re: The Big Mac index: Our interactive currency comparison tool

#58

Post by serverholic »

JohnJamesRambo wrote: post #27

Thought it was going to be this one, which I enjoy using a lot and find useful for getting the big picture. https://inflationchart.com/cpi-in-bigmac https://inflationchart.com/spx-in-bigmac In the 70s you could work minimum wage for an hour and afford three Big Macs. Now you have to work almost an hour to afford one Big Mac.: https://inflationchart.com/minwage-in-bigmac

Regarding that last chart, I changed it to "US Income" and got a different story. It looks like US Income has largely kept pace with the big mac.

Re: The Big Mac index: Our interactive currency comparison tool

#59

Post by SketchySeaBeast »

long_time_gone wrote: post #55
greedo wrote: post #38

Earlier quoted context omitted.

Big Macs in Denmark are roughly the same price as in the US, but in Denmark you'd make $22/hour...

It's not quite that simple. The US Big Mac [1] has 11% more calories than the Denmark Big Mac [2], which is an 11% difference. Also, the average hourly wage in the US is $31.63 [3] as of January 31st. [1] https://www.mcdonalds.com/us/en-us/product/big-mac.html [2] https://www.myfitnesspal.com/food/calories/mcdonalds-big-mac... [3] https://www.bls.gov/news.release/empsit.b.htm

> The US Big Mac [1] has 11% more calories than the Denmark Big Mac [2], which is an 11% difference.

Sorry, could we get someone to check those numbers?

Re: The Big Mac index: Our interactive currency comparison tool

#60

Post by legitster »

JohnJamesRambo wrote: post #27

Thought it was going to be this one, which I enjoy using a lot and find useful for getting the big picture. https://inflationchart.com/cpi-in-bigmac https://inflationchart.com/spx-in-bigmac In the 70s you could work minimum wage for an hour and afford three Big Macs. Now you have to work almost an hour to afford one Big Mac.: https://inflationchart.com/minwage-in-bigmac

The minimum wage one is next to useless. States and cities set their own minimum wages. Unemployed people or people on fixed income have wages of 0. This chart doesn't really describe any meaningful set of the population or how they are doing.
Post reply on HN