Definition
What the Big Mac Index measures
The Economist launched the Big Mac Index in 1986 as a light-hearted way to teach exchange-rate theory. The idea is simple: a Big Mac is the same product everywhere McDonald's operates, so comparing its local-currency price across countries reveals how over- or under-valued currencies are relative to the US dollar.
If a Big Mac costs $5.69 in the US and ₹220 in India, the implied exchange rate is ₹38.7 per dollar. If the market rate is ₹83 per dollar, the rupee is roughly 53% undervalued relative to the burger. That gap is, in miniature, what purchasing power parity measures across a whole basket of goods.
Why app developers care
The Big Mac Index is a smaller, faster, more memorable cousin of formal PPP. For indie devs setting prices across the App Store and Google Play, it offers:
- A single per-country multiplier that is easy to explain to non-economists
- Two refreshes per year (January and July), faster than the annual World Bank ICP release
- A widely cited dataset with clear methodology and a public CSV repository
- A cultural-recognition factor: consumer apps especially benefit when pricing logic ties to something users intuitively understand
It is not a substitute for the full World Bank PPP dataset, which covers a wider basket of goods, but it tracks the same direction.
How the data is structured
The Economist publishes raw Big Mac prices per country in local currency. To use it for app pricing, you derive a multiplier: divide the local Big Mac price (converted to USD at the market rate) by the US Big Mac price.
| Country | Big Mac price (local) | Implied PPP USD | Multiplier vs US |
|---|---|---|---|
| United States | $5.69 | $5.69 | 1.00 |
| India | ₹220 | $2.65 | 0.47 |
| Brazil | R$24.90 | $4.85 | 0.85 |
| Argentina | $9,800 ARS | $3.40 | 0.60 |
| Switzerland | CHF 7.10 | $8.30 | 1.46 |
App prices then scale by that multiplier. A $19.99 subscription becomes about $9.40 in India (which rounds to ₹699 or a similar charm-priced ending), $17.00 in Brazil, $12.00 in Argentina.
Limitations to know
- Burger inputs vary across countries. McDonald's sources beef, lettuce, real estate, and labor at very different costs that are not pure currency effects.
- The index covers only ~55 countries. The World Bank ICP covers ~190.
- Argentina's official market rate diverges sharply from the blue rate, distorting the index in some years.
- Big Mac price changes lag inflation, so very volatile economies look stale.
For most indie apps the index is good enough to set a starting position. PPP-style precision comes from layering World Bank or IMF data on top.
Examples
$19.99 base price using Big Mac multipliers
| Country | Base USD | Multiplier | Big Mac price | After charm rounding |
|---|---|---|---|---|
| United States | $19.99 | 1.00 | $19.99 | $19.99 |
| India | $19.99 | 0.47 | $9.40 | ₹799 |
| Brazil | $19.99 | 0.85 | $17.00 | R$84.90 |
| Argentina | $19.99 | 0.60 | $12.00 | ARS$11,800 |
| Switzerland | $19.99 | 1.46 | $29.19 | CHF 29.00 |
Notice Switzerland is higher than the US baseline. The Big Mac Index is one of the few PPP proxies that recognizes some countries have higher purchasing power, not just lower.
Frequently asked
What is the Big Mac Index in simple terms?
The Big Mac Index compares the price of a McDonald's Big Mac across countries to see which currencies are over- or under-valued. It is a quick way to estimate purchasing power without doing the full World Bank PPP calculation.
Is the Big Mac Index a reliable basis for app pricing?
It is a reasonable starting point, especially for consumer apps. It tracks formal PPP directionally but covers fewer countries (about 55) and is biased by McDonald's local supply chain. For 175-country coverage, World Bank PPP or IMF GDP per capita is more complete.
How often is the Big Mac Index updated?
The Economist publishes two updates per year, in January and July. The raw CSV is available on The Economist's GitHub repository, so the data is easy to fetch and verify.
Can I use the Big Mac Index commercially in my app pricing tool?
You can derive multipliers from the Big Mac data and use them commercially, with attribution to The Economist. Do not republish their raw burger prices as if they were your own data, and credit the source in your UI.
Further reading
- Google Play In-App Purchase Pricing by Country: The Complete WalkthroughA walkthrough of Google Play in-app purchase pricing by country: console mechanics, Pricing Templates deprecation, and what auto-conversion misses.
- App Store Pricing by Country: The Developer's ReferenceA reference for App Store pricing by country: how Apple's 900 price points work, what auto-conversion gets wrong, and what prices should look like.
- Real Localized Pricing: PPP Baselines + Prices That Feel LocalStore auto-conversion is currency math. Real localization is PPP-style baselines + rounding rules that land in familiar thresholds.