Tuesday, December 08, 2009
The BIG MAC Index!
that's a big mac...
The Big Mac (from Mc Donalds) is the hamburger. consisting of two 1.6 oz (45.4 g) beef patties, special "Mac" sauce, Iceberg lettuce, American Cheese, Pickles, and Onions, all served on a three part Sesame seed bun. It is one of the company's signature products.
Big mac index
The Big Mac Index was introduced in The Economist in September 1986 by Pam Woodall as a semi-humorous illustration and has been published by that paper annually since then.
The index also gave rise to the word burgernomics.
Burgernomics is based on the theory of purchasing-power parity, the notion that a dollar should buy the same amount in all countries. Thus in the long run, the exchange rate between two countries should move towards the rate that equalises the prices of an identical basket of goods and services in each country.
Our "basket" is a McDonald's Big Mac, which is produced in about 120 countries. The Big Mac PPP is the exchange rate that would mean hamburgers cost the same in America as abroad.
Comparing actual exchange rates with PPPs indicates whether a currency is under- or overvalued.
pls visit the following link to get a general idea about the big mac index...
more on the Big Mac Index... pls visit following link.
it make us wonder, why India is not on this list.
the Big Mac index, which lists the PPP of almost all the developed and developing nations, does'nt list India. One reason could be that majority of the Indian population is against consumption of beef, so Mac D, when they came to India had to reconsider and change their usual menu. which inturn made them not to have the Big Mac on the menu which is primarily made of beef. we do have other burgers like the Mac Chicken etc. but what's the use..., no Big Mac... no place in the Big Mac index...
Now here's a bonus video...