Since 1986, The Economist's Big Mac Index has been the go-to tool for a quick-and-dirty comparison of purchasing power across countries. It's clever, intuitive, and widely cited. But is one hamburger really enough to measure an economy?
The Big Mac Index: Elegant but Limited
The core idea is brilliant: since a Big Mac is virtually identical worldwide, price differences must reflect currency valuations and local economic conditions. If a Big Mac costs $5.69 in the US and $2.45 in India, the Indian rupee is "undervalued" relative to the dollar.
But there's a problem — a single product can't capture the full picture. Food costs depend on local labor, agricultural subsidies, and supply chains. A country might have cheap food but expensive tech or entertainment.
Enter the Burger Parity Score
Our BPS expands the concept to 6 products across 4 categories:
- 🍔 Big Mac — Food (labor + agriculture)
- ☕ Starbucks Latte — Food service (rent + labor)
- 📱 iPhone 15 — Tech (import taxes + VAT)
- 🥤 Coca-Cola — FMCG (distribution + local pricing)
- 🎬 Netflix — Digital services (willingness to pay)
- 🚗 UberX 5km — Transport (labor + fuel + regulation)
Side-by-Side Comparison
Let's compare what each index tells us about Turkey:
- Big Mac Index: Turkey's Big Mac costs $2.95 → Lira heavily "undervalued" → Turkey is very cheap ✅
- BPS: Turkey's basket = $142 → BPS 58.7 → Cheap for food, BUT iPhone costs $1,755 (highest in our data) → More nuanced picture ✅✅
By looking at six products instead of one, the BPS captures the reality that cost of living is multi-dimensional.
When to Use Which?
Use the Big Mac Index when you want a quick currency valuation snapshot. Use the Burger Parity Score when you want to understand actual living costs — especially if you're considering moving, traveling, or comparing salaries across countries.