Friday, December 23, 2011

Wealth of Country using Big Mac Index

I haven't posted for awhile as have been concentrating on Family obligations and buying physical Silver. After a recent discussion about values of currencies, I was interested in working which is the best currency and country to live in.

As living in Australia and being able  to buy four large chickens for less then one hours work at minimum salary so I thought it would be hard to top Australia. So was thinking how could I do this. I have always liked the Big Mac index to compare currencies against each other but though it might be better if we use the minimum wages of the country and see how many big macs they could buy using the minimum wage for one week.

Below is a rough guide I got based on information from wiki.

Country Minimum Per Week Price Big Mac No Big Macs per week
Russia 1082.5 75                       14
Brazil 155.5 9.5                       16
Argentina 375 20                       19
India 2000 84                       24
Greece 167 3.44                       49
Hong Kong 895 15.1                       59
US  275.5 4.07                       68
Mexico 2183.48 32                       68
Japan 24282 320                       76
Canada 389.5 4.73                       82
Germany 319.25 3.44                       93
UK 231.04 2.39                       97
New Zealand 494 5.1                       97
France 335.9425 3.44                       98
Sweden 345.5 3.44                     100
Australia 570 4.56                     125
Denmark 462.5 3.44                     134

I was surprised at Denmark having highest total until reading about them, which states that they are the most equally distributed in terms of income. So it makes sense that the poorest in Denmark would be able to eat a lot of big macs as their weekly salary wouldn't be far off from the Rich in Denmark.

I like this type of analysis as if we use average salaries then the income inequalities of places like USA have to much influence on the stats so when we focus on the minimum salary, it gives a better understanding of a significant number of people and the general health of country in my opinion.

I didn't put in poor countries like e.g South africa total is less the then three big macs in a week. Also Fiji is around 20 which I am happy about. If we had a comparison of buying a coconuts then Fiji would do better but that's why Big Mac index is one of most efficient comparison tools that I know off.

The biggest surprise to me was Russia, Brazil and Canada.For some reason I thought Canada would be better.

Anyway stats confirmed what am seeing on the ground and am very happy to be in Australia while we wait out the Financial reset and still don't have a good feeling on how things will turn out when this happens.  For me the biggest factor on how bad things will be is the price of oil in local currencies.


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