Burgernomics shows Switzerland has the most overvalued currency - Page 2

Carlos R · #21 13.01.2012, 15:54

	Quote:	neutron boy
	you completely miss the point here. the burgernomics chart specifically accounts for all of these factors already - costs of materials, real estate, labor, etc in coming up with a price for a big mac, a product that is pretty much uniform across every country that has a mcdonalds.

No it doesn't.

On the face of it, it is a comparison of price based on the false assumption that all Big Macs are equal - and they are not - they vary in size and composition.

While I take your point - I think - that the relative price reflects "all these factors", to then just say it is 62% over-valued implies a complete lack of understanding of how "all these factors" influence the price.

It is 62% more expensive yes. But not 62% over-valued.

This of course does not take into account what "value" means. For some a Big Mac is priceless for others worthless.

daveAust · #22 13.01.2012, 16:40

the big mac index doesn't tell the whole story. ignoring the balassa-samuelson effect of relatively cheaper, untradable goods (like the big mac) in low income countries, it magnifies the "true" discrepancies between two currencies.

BanksyUK · #23 20.05.2012, 12:20

Agree that these indexes are imperfect but provide a fun comparison. Just arrived an starting to save up for my first Swiz big mac

Wallabies · #24 20.05.2012, 12:34

	Quote:	neutron boy
	you completely miss the point here. the burgernomics chart specifically accounts for all of these factors already - costs of materials, real estate, labor, etc in coming up with a price for a big mac, a product that is pretty much uniform across every country that has a mcdonalds.

Wrong!! Big Macs are not the same across the world. In Switzerland MacDonalds is not as rampant as the USA or other countries where the fast food industry has taken over. Here thankfully MacDonalds is not on every corner although it is getting worse. As a result the price is marked up due to supply and demand, add to this the cost of meat on average in switzerland and its not hard to see why the Big Mac is a poor comparision. You nee look at what an average snack that people have when out costs you will find the comparison much better.

Its also the reason why the average person is a lot less obese then the USA

BrianJW · #25 20.05.2012, 12:58

Burgernomics, complete waste of time.

I had a colleague moving from one country to another (less expensive to much more expensive) and someone tried to justify his salary change as the change in ratio of Big Macs.

I guess thats great if you eat Big Macs morning, noon , and night. And if your landlord will let you pay your rent in Big Macs.

Personally, why only the Big Mac? I always have the meal deal so shouldn't we at least move to that more reliable indicator

.

In my colleagues case rent costs were easily double.