Methodology
The Formula
A score of 100 means the country is exactly at the global average. Below 100 is cheaper, above 100 is more expensive.
The Basket
We track 6 globally standardized products across 4 categories:
| Product | Category | Unit | Weight |
|---|---|---|---|
| 🍔 Big Mac | Food | 1 sandwich | 16.7% |
| ☕ Starbucks Latte | Food | Tall | 16.7% |
| 📱 iPhone 15 | Tech | 128GB | 16.7% |
| 🥤 Coca-Cola | Food | 330ml | 16.7% |
| 🎬 Netflix Standard | Entertainment | Monthly | 16.7% |
| 🚗 UberX 5km | Transport | 1 ride | 16.7% |
Calculation Process
- Collect prices — Local prices for each product in each country's native currency.
- Convert to USD — Multiply by the current exchange rate for a common comparison base.
- Cap outliers — Any price more than 3× the median for that product is capped at 3× to prevent extreme distortion.
- Compute weighted basket — Sum (price × weight) for each product. If a product is missing, weights are proportionally redistributed.
- Calculate global average — Average of all valid country baskets.
- Derive BPS — (Country basket / Global average) × 100.
Limitations
- Equal weighting — All products carry equal weight (16.7%). In reality, a Big Mac purchase is far more frequent than an iPhone purchase.
- Product standardization — While these products are globally standardized, quality, portion sizes, and availability may vary.
- Exchange rate sensitivity — Currency fluctuations can impact BPS significantly, especially for volatile currencies.
- Sample size — We currently cover 10 countries and 6 products. A broader basket and more countries would improve accuracy.
Frequently Asked Questions
How is this different from the Big Mac Index by The Economist?
The Big Mac Index uses a single product to compare currencies. The Burger Parity Score uses a basket of 6 products across food, tech, entertainment, and services for a more comprehensive measure of purchasing power.
Why these 6 products?
We selected products that are globally standardized (same product everywhere), span multiple categories (food, tech, entertainment, transport), and have consistent quality across countries. This makes price differences meaningful.
How do you handle different currencies?
All local prices are converted to USD using current market exchange rates. This gives a direct comparison of how much a product costs in dollar terms, regardless of the local currency.
What does a BPS of 120 mean?
A BPS of 120 means the country's basket costs 20% more than the global average. A score of 80 would mean 20% cheaper. A score of 100 is exactly average.