Big Mac Index Explorer
DATASCI 209 Final Project
Henry Gardner, Jordan Lawhon, Anushka Madwesh
What is the Big Mac Index?
The Big Mac Index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their "correct" level. It is based on the theory of purchasing-power parity (PPP), which states that exchange rates should adjust to equalize the price of a basket of goods and services across countries.
Since a Big Mac is the same product worldwide, comparing its price across different countries provides insight into the relative value of currencies and economic conditions.
How the Big Mac Index Works: A Simple Example
In theory, identical goods should cost the same across countries when you account for exchange rates. This is the principle of Purchasing Power Parity (PPP).
For example, if a Big Mac costs:
- $5.00 in the U.S.
- ¥25.00 in China
And the exchange rate is 6.0 yuan to $1, then:
- The Big Mac "should" cost ¥30.00 in China to match the U.S. price (6.0 × $5.00).
- But if it's only ¥25.00, it means the yuan is undervalued by about 17% against the dollar.
This suggests that, according to PPP theory, the yuan's exchange rate should be around 5.0 yuan to $1 rather than 6.0.
Understanding GDP per Capita
GDP per Capita (in USD) is another important economic indicator we use in this visualization:
Per capita just means "per person." So:
GDP per capita = Total GDP / Population
It's a way to roughly measure the average income or standard of living of people in a country. All values are expressed in USD for easy comparison across countries.
What Do the Numbers Mean (example values)?
| Country | GDP per Capita (USD) | What It Suggests |
|---|---|---|
| 🇳🇴 Norway | $110,000 | Very high income, rich country |
| 🇺🇸 USA | ~$80,000 | High income |
| 🇨🇳 China | ~$12,000 | Upper-middle income |
| 🇮🇳 India | ~$2,600 | Lower-middle income |
| 🇧🇫 Burkina Faso | ~$900 | Low income |
So a country with low GDP indicates widespread poverty or a struggling economy.
What It Doesn't Tell You:
- It's an average—it doesn't show how wealth is distributed.
- A country could have high GDP per capita but extreme inequality.
- It also doesn't measure happiness or quality of life directly.
About This Visualization
This interactive tool allows you to explore Big Mac prices around the world over time, while comparing to the global GDP values. The visualization consists of two main components:
- Interactive Globe: Color-coded by average Big Mac prices with helpful tooltips
- Line Charts: Detailed price trends for selected countries and GDP values showing differences in countries
Data is sourced from The Economist's Big Mac Index dataset, spanning from 2000 to 2024.
We also used a country codes dataset and a world atlas dataset to connect countires faster and build the interactive globe.
Goals and Audience
This visualization aims to make economic concepts like purchasing power parity and currency valuation accessible to a broad audience, in a fun way. Our goals include:
- Educational: Helping students and curious individuals understand global economic disparities with compared to a familiar product
- Exploratory: Enabling users to discover patterns and relationships between Big Mac prices and economic development
- Comparative: Providing an intuitive way to compare economic indicators across countries and time
The intended audience includes economics students, educators, casual learners, and anyone interested in global economic trends. No specialized knowledge is required to use and benefit from this visualization.
Limitations and Things to Note
- Not a Perfect Economic Indicator: While insightful, the Big Mac Index is a simplified measure and doesn't account for all factors affecting currency valuation or economic conditions.
- Data Availability: Not all countries have data for all years. Some countries may have joined the index later, have gaps in reporting, or have no data at all.
- Local Factors: Big Mac prices can be influenced by local factors like rent, labor costs, and taxes that vary between countries, not just currency valuation.
- Market Positioning: In some countries, McDonald's positions itself as a premium brand, which can affect pricing beyond pure economic factors.
- GDP Comparison: While we show GDP alongside Big Mac prices, correlation doesn't imply causation - many complex factors influence both metrics.
- Averaging: The globe visualization shows averaged prices over time, which may mask significant temporal variations in some countries.
While this visual is not a perfect economic indicator, it is a fun way to explore the relationship between Big Mac prices and GDP values across different countries.
How to Use the Visualization
Interactive Globe
- Rotate: Click and drag to rotate the globe
- Zoom: Use the mouse wheel to zoom in and out
- Hover: Move your cursor over a country to see its name, average Big Mac price, and GDP information
- Click: Click on a country to add its price and GDP trend charts to the right panel
Line Charts
- Up to 3 countries can be displayed simultaneously
- View both Big Mac price trends and GDP values for selected countries
- Compare economic indicators between different countries over time
- Hover over data points to see exact prices, GDP values, and dates
- Click the "×" button to remove a country's charts
Insights to Look For
- Price Variations: Notice how Big Mac prices vary significantly across regions
- Economic Development: Compare prices between developed and developing economies
- Currency Valuation: Higher prices may indicate overvalued currencies
- Inflation Trends: Observe how prices change over time in different countries
- Regional Patterns: Look for similarities among countries in the same region
The color intensity on the globe represents the average Big Mac price - darker red indicates higher prices.