While it clearly does not need to replace other ways of identifying the performances of different countries, it still provides a rather graphic and clear proof for the degree, to which the state economy has been upgraded over the past few years, as well as compare the economic rates of a particular country to the ones of the states all over the world. In other words, the Big Mac Index allows for defining the quality of the economic policy chosen by a particular state, as well as the efficiency of the state’s economic performance. Therefore, it is reasonable to assume that the development rates within a specific country define the price set for a Big Mac in it. Indeed, a closer look at the table will reveal that the highest prices for Big Macs are set in the states with the greatest GDP per person, including Sweden, Norway, Switzerland, Venezuela, etc., whereas the countries with the smallest GDP suggest the smallest prices for the McDonald’s product (India, Malaysia, Ukraine, Hong Kong, etc.). In other words, the lower the household income for a specific person of family is, the lower the price or a Big Mac is. However, a closer look at the way, in which prices for fast food in general and McDonald’s hamburgers in particular are set in various states, one will discover that the process of setting the price for a Big Mac depends greatly on the GDP per person in the chosen area in fact, the price for the product is in a direct proportion to the GDP per person (Hubbard et al., 2013). with the adjustment of the exchange rate (Morse, 2013). According of the latter, the price of the product in question in a specific state must be equal to that in the U.S.
In order to research the issues underlying the concept of the purchasing power parity (PPP). The difference in the prices listed above obvious however, the reasons for such discrepancies are not. XE Currency Converter (a screenshot) (XE currency converter, 2014) Price Analysis: What Explains Difference in Financial Policies dollars to the Australian ones and then into the currencies used in the states listed in the table 1. Consequently, a currency converter ( XE currency converter, 2014) was used in order to translate the U.S.
In the course of compiling the table, the necessity to convert the currency emerged several times. Big Mac Prices in January 2014, by Country (The Statistics Portal, 2014 XE currency converter, 2014)
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