Monday, May 9, 2011

Le Big Mac

I've always found it interesting how some places you travel seem very expensive and others relatively cheap.  Because of different currencies and conversion rates, it's always difficult to make an apples to apples comparison between the various countries.

To help with this, I like to use the Big Mac Economic Index.  McDonald's restaurants are relatively universal around the world and although there are cultural menu variations, a Big Mac, Fries, and Coke in the U.S. is the same as in France, China, Australia, etc. -- except for price.  The price of a Big mac combo in the U.S. is roughly $5.00 - $6.00 depending upon where you live.  In Paris, it is 5.80 euros, which when you convert to dollars is approximately $8.75.  This certainly beats the price we saw in Switzerland back in 2009 ($11.15), but pales to price we saw in China in 2010 ($3.09).  While this is by no means scientific and is only one product out of millions, it does give an appreciation as to the relative levels of price and how we perceive it as being expensive or not.  (Note we didn't actually eat at McDonald's -- there's much better food to be had in Paris!!)

Gas was no better although taxes and other factors play a significant role in determining price.  In Brittany where we actually passed a few gas stations during our drive from place to place, gas was going for about 1.40 euros per liter.  When you convert liters to gallons and convert euros to dollars, it works out to about $7.63 per gallon.  That's one of the reasons cars are smaller and mass transit so extensive.  So the next time you're out going through the McDonald's drive-thru, just be glad you're not doing that in France.  Your wallet will thank you.

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