The 2016 Big Mac Index has just been published by the Economist.

The Big Mac Index allows to gauge the cost of living in different countries by comparing the price of a Big Mac. The advantage of using this product as a reference point is that McDonald’s offers Big Macs virtually in all countries and in most locations the burger is made using local ingredients and served by local staff, which allows to minimize the effects of transportation cost, import tariffs, and other external factors.

The chart below provides a comparison of how much a Big Mac costs in different countries, as of January 6, 2016 exchange rates.

Key observations:

• As before, Switzerland, Sweden, and Norway remain the most expensive countries with the cost of living (price of Big Mac) up to 50% higher than in the U.S. However, the economic crisis in Europe in general, moved the cost of living in these countries much closer to that of the U.S. Norway, whose currency has been hit hard by the falling oil prices, shows the greatest drop in this group.
• Likewise, Venezuela has been hit hardest by the falling oil prices. From a country with one of the highest Big Mac prices in 2014 it moved to the very bottom of the list in 2016.
• In just about any country, a Big Mac costs less  in 2016 than what it cost a year ago. The only country where the price went slightly up is India. This is a result of both the weakening global economy, but more importantly of strengthening of the U.S. dollar and thus a drop in the Big Mac price in the dollar equivalent.

Original publication here.

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