The McDonald’s burger can be found in some 120 countries around the world, employing some 1.7 million people serving over 70 million customers (if you want to know the Countries that NOT have a McDonald’s click here).
It is so ubiquitous that some companies and organisations are using the BigMac price as a beacon to compare the cost of living in a given Country and correlates the subsistence money paid to their employees when traveling to the relative price of the BigMac. The BigMac price is higher in New York than in La Paz Bolivia? Your travel expense budget is scaled up accordingly. This is the Burgernomics.
However, the actual price of the BigMac you experience when travelling abroad depends on the currency exchange rate. Now, if you assume that the price of a BigMac should be the same everywhere (since it the goods you are consuming is exactly the same -in economy if there are no external friction, given the same good you should have to pay the same price. It actually never happens but it is a good theoretical statement) then if it turns out that it is not the case it means that your currency exchange rate is either under or over evaluated.
Basically every year the Economist looks at the BigMac price worldwide and comes up with a report showing the differences in currency exchange rates, taken the BigMac price in the US as baseline.
It is not just a funny way of looking at the economy, over time it provides some insight on the average wellbeing in a Country. It can also serve to stimulate some sociological considerations, like the BigMac seen as a planB in Southern European Countries (where most people, including youngsters prefer to have something different) or seen as an extravagant luxury in Colombia (where there are cheaper options everywhere).
This year the Economist’s BigMac Index is available here. You can move your mouse (or finger) on the graphic to see the position of your Country. You will notice that this year only 5 Countries (Switzerland top of the list with a 30%+, Norway, Uruguay, Sweden and Canada) have an over-evaluated currency, all the others are under-evaluated (Costa Rica being the one with the greatest under-evaluation -24.1%).
As we move to the cyberspace the different cost of “bits” tend to fade away (although there may be enforced price differences, but these are usually due to the taxes locally imposed). The Digital Transformation by shifting value from products to services and moving services in the cyberspace is a force in equalising markets.