Unofficial Indicator
Big Mac Index
Compare burger prices worldwide to estimate purchasing power parity and currency valuation.
US Big Mac Price
Global Average Valuation
Countries Covered
Price Date:
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Exchange Rate Updated:
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Most Overvalued vs US
Most Undervalued vs US
Country Comparisons
| Country | Currency | Local Price | Price in USD | Valuation vs US |
|---|---|---|---|---|
SourceUnofficial indicator based on public data.
Big Mac Index explained
What is the Big Mac Index?
The Big Mac Index gauges currency values by converting the price of a McDonald's Big Mac in each country into dollars and comparing them. The Economist created it in 1986 as an accessible way to illustrate purchasing power parity, the idea that an identical good should eventually cost about the same everywhere. The point of the index is to show how far actual exchange rates sit from that level. Its creators have always described it as a light-hearted teaching device rather than a precise forecasting tool, which is why it is often called burgernomics.
How are over- and undervaluation calculated?
You first divide a country's Big Mac price by the U.S. price to get an implied purchasing power parity exchange rate. If a Big Mac costs 5,500 won in Korea and 5 dollars in the United States, the implied rate is 1,100 won per dollar. Comparing that with the market rate tells you the direction: if the market rate is higher, the currency is considered undervalued against the dollar, and if it is lower, overvalued. Because prices are naturally lower in poorer countries, The Economist also publishes a version adjusted for GDP per person.
What are its limitations?
A Big Mac cannot be traded across borders, so price gaps between countries are never closed by arbitrage the way the theory assumes. Each price also bundles in local wages, rent, taxes, sourcing costs and competitive conditions, which makes it hard to isolate the currency component. The burger occupies a different position from market to market as well: cheap everyday food in some countries, a relatively expensive meal out in others. It is a useful rough check on direction, but not enough on its own to judge whether an exchange rate is at the right level.
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