Little Mac Index
2006-11-24
McDonald's has prospered globally because it offers a standard
product, whether in Buffalo or Beijing. The Economist seized on
this to create the Big Mac Index for measuring purchasing-
power parity. Comparing prices of a standardized product can
give a quick indication of where currencies are headed. But what
if The Econ-omist's fundamental assumption was wrong? What if
a Big Mac isn't always a big Mac? In the U.S., McDonald's flagship
hamburger weighs 219 grams. In Austria, it slips one gram to
218g, which isn't statistically significant. Germans, though, get
only 211g of wholesome nutrition, about the same as the Poles.
Where it becomes really interesting is in the CR and Slovakia. A
Big Mac there weighs only 200g, a whopping 8.7% less than on
the U.S. market. Even Ronald McDonald would have to admit that
a deviation of this size wreaks havoc in the world of
burgernomics.
[Czech Republic United States]
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