BIG MAC INDEX

Big Mac Index

Big Mac Index

Introduction 

Big Mac Index is an indicator whose function is to analyze the price of McDonald's hamburger restaurant in 48 countries worldwide, is presented by the magazine "The Economist" for 25 years, twice annually. It took this topic because it is very mentioned global brand because the product itself "McDonald's", in some way be described as Marketing you receive, the purpose is to investigate the change in price level and Latin America the factors that influence the measurement of the same, in order to analyze whether the exchange rates of currencies are well valued or if, on the contrary, are undervalued or overvalued on its actual value. 

Big Mac Index 

According to the magazine "The Economist" The Big Mac Index is an indicator that builds on the price of a hamburger consumed in the local McDonald's in different countries of the world, the study analyzed here is taken as the base price Latin American level. History 

Since 1986, the magazine "The Economist" published regularly (twice a year) the index "Big-Mac". The theoretical approach of the Big Mac index is derived from the theory of purchasing power parity (PPP) which states that international arbitration is possible, a dollar (or other currency) must have the same purchasing power in all countries.  That is, the exchange rate must match the prices of a basket of goods and services in two countries. If you fulfill the PPP theory should serve one U.S. dollars to buy the same, or the same amount of products in all countries. However, this does not always happen because with the same amount of money in some countries you can buy a physical volume of goods and services far beyond what can be bought from others. 

Where is it most expensive to buy a Big Mac?

According to the Big Mac index from The Economist, the real money is the most expensive in the world, 52% overvalued against the dollar if we compare the price of McDonald's sandwich. And given the level of development of the country, the British weekly believes it is overvalued even 149%. This means that Brazilian products are mechanically three times more expensive than Chinese products.

As The Economist said, Brazil has seen its currency appreciate over the past two and a half years after a low of 2.4 per dollar: it reached 1.57 real per dollar. Concerned, the growth of the country, which attracts capital but also interest rate ...