The Big Mac Index

Things I’ve learned: A Big Mac is only $1.36 in Russia right now!

Back in 2012, I spent a month traveling throughout Russia on the Trans-Siberian Railroad and once I made it to Moscow, the only place I could afford to get my caffeine fix was at the golden arches of McDonald’s. At the time, a McD’s coffee cost about $3 or 90 ruble. Today that same cup of coffee would only be about a $1.25.

Created back in 1986 by the folks at The Economist, The Big Mac Index has become a common economic means  for determining if currencies are at their proper level. Relying on the economic theory of purchasing power parity (PPP), The Big Mac Index assumes that the same basket of goods and services purchased in two different countries should end up costing an equal amount of money–that is to say that over time the exchange rates would equalize the price. Below is a world map depicting  current world currency valuations. To play with the interactive graph of the Big Mac Index as well as currency valuation charts over time, visit The Economist.