From 2014 to 2016, there was a rapid increase in the dollar against the ruble - almost twice. Until now, many citizens of our country are faced with the consequences of this phenomenon: rising prices, increasing interest on foreign currency loans, etc. But what is the reason for this? Devaluation, inflation, "tricks of the Americans", sanctions? Or maybe all this together? The answer is unclear. However, there is an alternative exchange rate - a hamburger score, or the so-called Big Mac Index. We will try to figure out what it is and whether our ruble is as “weak” as they say about it.
Big Mac Index: what is it
For the first time, the idea to evaluate currencies by bigmac was proposed by The Economist magazine in an article by Pam Woodall back in 1986. It was in it that in a joking manner, the author appreciated the real exchange rate with the help of a hamburger.
Since then, this estimate has been called the Big Mac Index. It is still published in this journal.
Is a hamburger an ideal indicator?
The logic of assessing the real value of currencies was based on the fact that the famous McDonald's hamburger is represented in many countries of the world. There is a restaurant on almost every street in every city.
Why exactly bigmack? The fact is that it contains a sufficient amount of food products - bread, meat, cheese, vegetables. That is, the food minimum that a person needs for normal life.
Its cost depends on many factors:
- volume of issue;
- rent;
- raw materials;
- work force;
- infrastructure, etc.
It is the universality of the components of the hamburger, the wide geography of restaurants around the world that make it clear the real exchange rate of national currencies.
Ruble underestimated?
To understand the fair dollar today, you need to look at the Big Mac index. Russia is clearly underestimated in it.
According to the study, in July 2016 a bigmack in Russia cost $ 2.05, and in the USA - 5.02. This means that the real ruble rate is 25.79 as of July 2016, which is 59.3 percent higher than the official rate of the Central Bank of Russia.
Are we the only ones we underestimated?
The Big Mac Index indicates that currencies of many developing countries are artificially underestimated. Who and for what purpose does this remains a question. We offer a list of the most undervalued currencies in the world.
Big Mac Index: Table
| Country (Currency) | Currency undervaluation percentage |
| Russia (ruble) | 59.3 |
| Ukraine (hryvnia) | 46.6 |
| China (Yuan) | 41.1 |
| India (Rupiah) | 60 |
| South Africa (rand) | 50 |
From the table it is clear that the rate of some world currencies is clearly underestimated.
The position of economists
Leading economists do not seriously take into account the Big Mac index.
All of them give the following arguments:
- The structure and culture of consumption in different countries are individual. For example, eastern countries prefer traditional cuisine, with the advent of a wide range of Japanese restaurants in Russia, many have changed bigmack in their diets and switched to sushi and rolls.
- A great influence on the price has the level of wages in the country. The lower it is, the cheaper the hamburger. We agree that the exchange rate and average earnings in the country have nothing in common.
- The price of a hamburger at McDonald's also depends on competition in a particular country in the world. If, for example, there is one single restaurant in Moscow, as it was in the late 80s. of the last century, and the queue for it is several kilometers, then its cost will be higher than if there are at least 5 more similar cafes around.
There is only one conclusion: the Big Mac index cannot be a serious economic indicator for real determination of the national currency.
What can be determined by a hamburger
But it is a mistake to believe that the Big Mac index is useless. He may not show the real value of the currency, although many will not agree with this. But, analyzing the price of a McDonald's hamburger, you can understand the standard of living in the country.
It manifests itself in the following indicators:
- Consumer status of society.
- The real level of wages. The higher it is, the more expensive a hamburger.
- Rental of premises. The more developed a city or country is in the commercial plan, the more renting a room will be more expensive.
- Developed competition.
By these indicators, of course, bigmak can say a lot. Indeed, the higher the standard of living of citizens, the more expensive a hamburger is. Most of all are given for it by residents of the USA, Switzerland, and the EU. Least of all - Russia, Ukraine, India, etc.
