For example, in the Czech Republic, a Whopper costs 99 Czech Korunas (CZK). Once this initial data collection was finished, I calculated the implied exchange rate between the local currency and the US Dollar. What resulted is a dataset of Whopper prices and exchange rates for 49 countries. In the US, I took the average Whopper Price for 4 cities around the country (Dallas, New York, Chicago, and Los Angeles).

If a price wasn't available, the country was scratched off the list. In some cases, the burger price by itself was not available, and only the Whopper meal was. If a price couldn't be found, it was usually because online prices simply weren't given. This often meant going to the local Burger King website or the partnering food delivery company to find the price of a Whopper. Next, the price of a single Whopper (burger only) in the local currency was collected. First, the current exchange rate to the USD was collected for each country. The Economist helpfully hosts the code and data for their Big Mac Index on Github, which allowed me to match my index calculation method to theirs. In addition, where both chains exist, we can see where they agree or disagree. This will allow us to bring the concept of burgernomics to more countries. Where Mcdonald's has chosen not to enter a country, Burger King may have. This second reason is why I decided to continue the tradition of burgernomics with another global burger chain, Burger King. Second, Mcdonald's isn't everywhere, so the index is limited in geographic scope. First, differences in wages and marketing costs could explain differences in Big Mac prices from country to country. Over the years, much research has been done into 'burgernomics', as The Economist calls it.Įven with so much success, there are two serious limitations to the Big Mac Index. The basic idea is that a Big Mac is the same in every country where it is sold, so you could judge the relative value of a currency by its price in the local currency. The final index tells you whether a currency is under or over-valued compared to a base currency, typically the US dollar. The prices of Mcdonald's famous Big Mac are recorded in the local currency, then compared to the official exchange rate. The Big Mac Index was released in 1986 by The Economist, a newspaper, as an easy to approach explanation of the concept of purchasing power parity ( PPP) between currencies. Thank you to Deepnote for sponsoring this week's article. It's all hosted on Deepnote, a new kind of data notebook designed for collaboration.

The Whopper Index You can find the code and data for this article at this link.

Big mac index example