The Big Mac Index and Purchasing Power Parity: Which Big Mac is Actually the Yummiest?

The Economist invented the Big Mac Index in 1986 to better demonstrate Purchasing Power Parity (PPP). But does The Economist actually eat the Big Macs in their study? The Big Mac Index assumes parity in value; but I disagree, because Big Macs around the world are not equal in yumminess.

What is PPP? Investopedia defines it as:

An economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency’s purchasing power.

In layman’s terms; if a basket of goods and services is worth US$100 in the United States and an identical basket of goods and services is worth only US$ 77 in the Philippines at current exchange rates, then the Philippine Peso (PHP) is undervalued by 23 %.

Unfortunately, many people in the world no longer use baskets, and deciding which good makes it to the basket may be contentious. Since McDonald’s (see MCD:US latest stock quote), the company that serves Big Macs, can be found in most countries, using the burger as a proxy for the “basket of good and services” makes sense. Of course, the Big Mac method is not accurate; but according to The Economist, this makes the PPP theory more “digestible”.

Digestible? Did The Economist staff actually eat the Big Macs? Do The Economist writers actually eat at McDonald’s? In my opinion, some Big Macs are yummier than others.

 

Here is a rundown from Big Macs from around the world, and a depiction of the countries’ under/ over-valuation against the US Dollar:

 

Big Mac from New Haven, Connecticut, United States of America. Average Price: US$ 4.79

Big Mac in New Haven Connecticut USA
Do students in Yale eat this New Haven Big Mac while debating the merits of the Big Mac Index? Image from spaceofjase.com

My friend spaceofjase liked this burger from New Haven. My opinion: I ate an American Big Mac in Chicago. As the city is the location of franchise no.1, Chicago didn’t mess this up for me. The US Dollar is our base currency here by the way. Continue reading The Big Mac Index and Purchasing Power Parity: Which Big Mac is Actually the Yummiest?

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Papal Visit Philippines 2015 Special: How much is the Catholic Church worth?

This post is part of a series that commemorates the Pope’s visit in the Philippines on January 15-19 2015.

How much are the assets of the Catholic Church worth? The Sistine Chapel in the Vatican, Georgetown University in Washington, D.C., University of Santo Tomas in Manila, St. Patrick’s Cathedral in New York, are just a few of the prime real estate assets of the Catholic Church. The Church also has a vast collection of expensive artworks. The Catholic Church is also the largest non-government provider of health care services in the world.

It is safe to say that the Catholic Church is one of the most asset-rich entities in the world. So how much is the Catholic Church worth? Continue reading Papal Visit Philippines 2015 Special: How much is the Catholic Church worth?