Big Mac Index: where a Big Mac was cheapest in the world in 2016
McDonald's sells a broadly identical burger in more than 100 countries, which makes it an unusually neat yardstick for the value of money. The Economist's Big Mac Index turns that burger into a rough gauge of which currencies are cheap and which are dear — and as of July 2016, the widest gap ran from Ukraine to Switzerland.
The idea rests on a piece of economic theory called purchasing-power parity. In principle, once exchange rates are taken into account, an identical good should cost the same everywhere. When it does not, the difference hints that a currency is trading above or below its "fair" value against the dollar. The Economist has published this comparison since 1986, and it now refreshes the figures twice a year, in January and July.
The burger has become a cultural shorthand too. It sits behind the tongue-in-cheek "Golden Arches Theory of Conflict Prevention" — the claim, popularised by the writer Thomas Friedman in the 1990s, that no two countries with a McDonald's had gone to war. Later conflicts, including the 2008 war between Russia and Georgia, comprehensively disproved it.
Where the burger was cheapest — and dearest
On the July 2016 index, the cheapest Big Mac in the survey was in Ukraine, at about US$1.57. Malaysia (about $1.99) and Russia (about $2.05) were close behind. At the other end, Switzerland topped the table at about US$6.59, ahead of Norway ($5.51) and Sweden ($5.23). That leaves almost US$5 between the cheapest and most expensive burger measured — for a product designed to be the same everywhere.
The simple average across the roughly 56 territories surveyed was about US$3.61 — close to the price in Pakistan ($3.58), which sat near the middle of the ranking. The US baseline itself was about $5.04, which is why so many currencies came out looking cheap against the dollar.
What the price gap actually tells you
The index converts each local price into dollars at the market exchange rate, then compares it with the US price. A burger that is cheaper in dollar terms than in America suggests the local currency is undervalued against the dollar; a dearer one suggests it is overvalued. As of July 2016, Ukraine's hryvnia looked roughly 69% undervalued on this raw measure — meaning a traveller carrying US dollars paid about two-thirds less for the same burger than at home.
On the raw July 2016 index, only a handful of currencies — Finland, Sweden, Norway and Switzerland — bought a dearer Big Mac than the dollar did. Everywhere else, the burger was a bargain in dollar terms.
Switzerland sat at the opposite extreme: at $6.59, its Big Mac was about 31% more expensive than the US equivalent, marking the Swiss franc as the most overvalued currency in the survey. That pattern — a strong franc, cheap emerging-market currencies — has been a fixture of the index for years.
Why the burger is not the whole story
The Big Mac Index was never meant to be a precise valuation tool, and its author has always framed it as a way to make exchange-rate theory digestible. A Big Mac is not purely a traded good: its price folds in local rents, wages, taxes and how much competition a McDonald's faces on the high street. Poorer countries tend to have cheaper labour and lower rents, so their burgers look "undervalued" even when their currencies are not far off fair value.
To address that, The Economist also publishes a version adjusted for GDP per person, which is a fairer way to compare rich and poor economies. Either way, the raw index is best read as a rough, repeatable snapshot rather than a forecast.
What it means for a traveller
- A low local Big Mac price is a quick hint that your home-currency budget will stretch further on the ground.
- High-price countries such as Switzerland and Norway are consistently expensive for visitors, not just for burgers.
- Exchange-rate swings move the rankings fast — currency-crisis years can reshuffle the table between one release and the next.
- Because the index refreshes every January and July, always check the date attached to any figure before treating it as current.
Frequently asked questions
What is the Big Mac Index?
An informal gauge published by The Economist since 1986. It compares the price of a McDonald's Big Mac across countries to estimate whether currencies are over- or undervalued against the US dollar, on the theory that an identical good should cost the same everywhere once exchange rates are accounted for.
Where was a Big Mac cheapest and most expensive in 2016?
As of July 2016, the cheapest surveyed Big Mac was in Ukraine at about US$1.57, and the most expensive was in Switzerland at about US$6.59 — a gap of roughly US$5.
What does it mean that a currency is undervalued?
If a local Big Mac costs less in dollar terms than the US one, it implies the currency is undervalued against the dollar. In July 2016 the Ukrainian hryvnia was roughly 69% undervalued on this raw measure, so a US visitor's dollars went a long way.
Is the Big Mac Index still updated?
Yes. The Economist refreshes it twice a year, in January and July. The prices and rankings quoted here are from the July 2016 release, so current figures will differ.
Is the Big Mac Index a serious economic measure?
It was designed as a light-hearted illustration of purchasing-power parity rather than a precise tool. Local wages, rents, taxes and competition all shape the burger's price, which is why The Economist also publishes a GDP-adjusted version.
- The Economist — Big Mac Index, July 2016 release (Ukraine $1.57; Switzerland $6.59; world average ≈ $3.61; US baseline ≈ $5.04).
- The Economist — "The Big Mac index" methodology and GDP-adjusted variant.
- Big Mac Index open dataset and methodology (github.com/TheEconomist/big-mac-data).
- Encyclopaedia Britannica / Wikipedia — Big Mac Index history (published since 1986; purchasing-power parity, law of one price).