Big Mac Prices and National Wealth
Easy
Why does a Big Mac cost $1.26 in one country and $4.90 in another? You look up Big Mac prices in 10 countries. You also gather each country's GDP per capita (average income per person).
You plot both numbers side by side for each country. In poorer countries, the burger price is high compared to income. In wealthier countries, the price is low compared to income. The one surprise is that higher national wealth does not always mean a more expensive burger.
Hypothesis
The hypothesis is that as the GDP per capita of the country increases, the price of the Big Mac also increases.
Method & Materials
You will select 10 countries based on their GDP per capita, research the GDP per capita and the price of the Big Mac in each country, create two charts to compare the data, and analyze the results.
You will need the GDP per capita of various countries, the price of the Big Mac in various countries, and a computer to help analyze the data.
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See what’s includedResults
The results show that in countries with a GDP per capita income that is less than US$25K, typically the price of the Big Mac is greater than the GDP per capita income, per US$10K. For the countries with a higher GDP per capita, the price of the Big Mac is less than the GDP per capita income, per US$10K. The only exception is Switzerland. Increasing the GDP per capita income does not have much influence on the Big Mac selling price in the particular country.
Why do this project?
This science project is interesting because it uses the Big Mac Index to compare the currency exchange rate between two countries and to determine whether the currency is undervalued or not.
Also Consider
Experiment variations to consider include comparing prices of other international food chains like Pizza Hut or Burger King, and comparing prices for countries within Asia and countries within Europe.
Full project details
Additional information and source material for this project are available below.Related video
These videos explain the science behind this project and demonstrate key concepts used in the experiment.
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