This is illustrated in Figure 1, showing how prices for different product groups differ across countries. The top part of Figure 1 shows that the prices of durable goods e. This is because durable goods are frequently traded across countries, which tends to equalise their price levels.
How much is a big mac in australia 2012
On the other hand, services are often purchased locally and are less traded across countries, thus making it possible to have larger price differences across countries. The comparison shows that services tend to be more expensive in high-income countries e. This is the so-called Balassa-Samuelson effect: the higher productivity in advanced countries for the production of tradeable goods leads to higher wages across all sectors in these countries.
Since cross-country differences in services productivity are smaller than in tradable goods productivity, these higher wages lead to higher services prices in advanced countries. Furthermore, overall consumption prices and Big Mac prices show a similar pattern, although for some countries the difference between Big Mac prices and overall consumption prices can be quite significant. Perhaps the most intuitive way to compare macroeconomic aggregates across countries when they are expressed in different currencies is to use exchange rates.
However, such comparisons do not account for the fact that prices are different across countries, even if expressed in the same currency. Making it possible to adequately adjust for price differentials is precisely the purpose of PPPs. Figure 2 shows that conclusions derived from international comparisons of per-capita household final consumption, a useful indicator of material well-being, vary significantly depending on whether exchange rates or PPPs are used to convert consumption in national currency to a common unit.
Nevertheless, and consistently with Figure 1, measures based on relative Big Mac prices tend to overstate consumption per capita in high-income countries and to understate it in lower-income countries, as compared to measures based on PPPs which take into account the whole range of goods and services consumed by households. The Big Mac index: How many burgers can a Romanian afford? Irina Marica. View the discussion thread.
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Romania Insider Free Newsletter Subscribe now. Trending content 11 July Romanian tennis star Simona Halep reaches first Wimbledon final. The average price for a Big Mac burger in Switzerland was 6. As many countries have different currencies, the standardized Big Mac prices are calculated by converting the average national Big Mac prices with the latest exchange rate to U. Its global revenue amounted to about Most McDonald restaurants are spread across the United States.
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Chart type. Share on Social Media. Download started Please be patient - this may take a moment. Description Source More information. Show sources information As a Premium user you get access to the detailed source references and background information about this statistic. By diverting the average national Big Mac prices to U.
The Big Mac can also be a good indicator for the individual purchasing power of an economy since he exists worldwide in standard size, composition and quality.
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Source Show sources information As a Premium user you get access to the detailed source references and background information about this statistic. Other statistics on the topic Consumer prices around the world Inequality of income distribution in China based on the Gini index Inflation rate in China Statista Accounts: Access All Statistics.
Big Mac index - global prices for a Big Mac in January 12222, by country (in U.S. dollars)*
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