The Big Mac Index

The Economist's Big Mac index is a fun way to keep track of relative purchasing power parity. Though the index has its weaknesses, its still a reliable rough guide to what your currency could buy. The cost of a Big Mac, representing the cost of producing one will somehow include rental, distribution and transportation costs, cost of ingredients, wages, advertising, etc. Hence you could be earning less effectively but you could be buying a lot more in reality.

Malaysia is supposed the second cheapest place on the index followed by China. Is this a reflection of competitiveness? Or a reflection of how many "things are subsidised" in that country? We all know the answer.

The Economist's Big Mac Index


Now, let's do a Big Mac index of our own but this time use the cost of buying a car - I bet you we'd rank second from the top, just below Singapore compared to the rest of the world. How in the world do we get to be one of the most expensive place on earth to buy a car??? Again, we all should know the answer.

What's really pathetic is when you divide the cost of a car with the average wage earned per country - I am bloody sure we would be NUMBER ONE in most unaffordable list.

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