The first column of our table converts the local price of a Big Mac into dollars at current exchange rates. The Big Mac PPP is the exchange rate that would leave a burger in any country costing the same as in America. Invented in 1986 as a light-hearted guide to whether currencies are at their “correct” level, our “basket” is a McDonalds' Big Mac, which is produced locally in almost 120 countries.

This is the thinking behind The Economist's Big Mac index. The theory of purchasing-power parity says that in the long run exchange rates should move towards rates that would equalise the prices of an identical basket of goods and services in any two countries. A better method is to use purchasing-power parities ( PPP), which take account of price differences.

Prices tend to be lower in poor economies, so a dollar of spending in China, say, is worth a lot more than a dollar in America. Converting national GDPs into dollars at market exchange rates is misleading. Little Caesars increased the price of its $5 Hot-N-Ready pizza to $5.55, while Chipotle raised menu prices by 4% in 2021 to counterbalance the higher minimum wages for its employees.HOW fast is the world economy growing? How important is China as an engine of growth? How much richer is the average person in America than in China? The answers to these huge questions depend crucially on how you convert the value of output in different countries into a common currency. Burger King pulled the Whopper from its Two for $5 menu to offset the rising costs of shipping, labor, and ingredients.

Countless popular fast-food items are facing price hikes amid supply chain disruptions.Ĭhicken chain Wingstop said on Thursday the prices of its chicken wings grew by 27.5% in the last quarter of 2021. As CNBC points out, a 'healthy' rate of inflation is 2 to 3% on an annual basis.īut the Big Mac isn't alone. 2021 alone, inflation soared to 7%, which coincided with the 7% increase in the price of a Big Mac. Now costing an average of $6.05 in the U.S., the price of a Big Mac has grown even more than the rising cost of living, which is up by 37% in a decade. For more fast food news, don't forget to check out the 8 Worst Fast-Food Burgers to Stay Away From Right Now.

Average price of a big mac