That is the price of a Big Mac in a given country divided by the price in the US. The vertical axis in Figure 1 shows the January 2021 Big Mac exchange rate. Let’s take the bull by the horns and see how the two datasets compare. Indeed, the Economist updates its Big Mac Index twice a year, albeit for only 50-odd countries, and can provide much more timely data than the ICP. But it seems to me that the Economist is able to do a very similar job at only a fraction of the cost. The ICP produces a useful trove of detailed cross-country price information, which data junkies like me really appreciate.

And, the next update of this exacting process won’t be conducted until 2021. It took nearly three years to collate and release the results. In 2017, it collected the prices of close to 1000 different goods and services in each of 176 countries. The ICP calls itself “one of the largest statistical initiatives in the world” and it is easy to see why. The ICP is a statistical initiative under the auspices of the United Nations, which is coordinated by the WorldBank. The task of defining this common basket and then pricing it around the world falls to the International Comparisons Program (ICP). For example, if the basket costs $1000 in the United States and 9,400 pesos in Mexico, then the dollar-peso PPP exchange rate is 1 to 9.4. PPP exchange rates represent the rate at which the currency of one country would have to be converted into that of another to buy a common basket of goods and services. Purchasing power parity (PPP) exchange rates offer an appealing alternative. However, market exchange rates can fluctuate wildly, they can be manipulated by central banks and they can diverge from economic fundamentals for long periods of time. To make cross-country comparisons, economists often rely on market exchange rates. So, economists have a strong interest in understanding how prices compare across countries. In my opinion, these data provide an interesting perspective on the evolution of prices both in China and internationally.Ī country’s price level is central to assessing the size of its economy and the wealth of its citizens. The Economist has been collecting data on MacDonald’s hamburger prices around the world for many years. In honor of this Chinese New Year’s mascot, the Golden Bull, I wanted to explore a beefy dataset with you – the Economist’s Big Mac Index. (Yicai Global) March 1 - Happy Year of the Ox! I want to take a moment, in my first Opinion Piece of this new lunar year, to wish you and your families health, prosperity and all good fortune.

Cost of a big mac in rmb