Big Mac Index and other comparisons

Making the global economy understandable is not that hard. It just takes some imagination.

The Economist Intelligence Unit issued its annual Worldwide Cost of Living Survey. (The survey is free but you have to register with EIU.)

Okay, you say, that list is interesting but what does it mean?

In the report the EIU compares the cost of bread, rice and gasoline. The last item alone could be a great hook for doing a story about the cost of gasoline in the States and how and why it costs more (or less) elsewhere.

Yes, it takes a little digging. But that is what we journalists are supposed to do.

Another way to approach the global economic story — and how it has a local tie — is to look at the tongue-in-cheek EIU Big Mac Index.

The Big Mac Index is based on the idea that exchange rates should adjust to equal the price of goods and services in different countries. And what is more ubiquitous than the Big Mac?

According to burgernomics, if a Big Mac in a country costs more than the U.S. average of $4.20, then that currency is overvalued. If it is less, then the currency is under valued.

This is hardly a scientific survey but it does help put things in perspective. It helps provide context.

So maybe, by using both charts and making a few calls, a local reporter can do a story about why there is a growing of foreign visitors to the United States and what that means for the LOCAL economy.

FYI: For every 82 U.S. visas issued in Brazil, Florida gains 1 job. The U.S. embassy and consulates in Brazil issued 800,000 visas last year. So there is a direct local-global link here.

Maybe the Brazilians really are coming to the States because the Big Mac is almost a buck and a half cheaper.

And don’t forget that the U.S. Census Bureau has loads and loads of data and links to help work in more refined information.

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1 Comment

Filed under International News Coverage, Story Ideas

One response to “Big Mac Index and other comparisons

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