6 ms·

Code and data for The Economist's Big Mac index

138 points by mkirchner 7y ago

tomasfarias 7y ago
I see Argentina's exchange rate is about 60 Pesos per 1 Dollar. While that's not false, the government recently imposed a 30% tax to all foreign currency purchases. So while the exchange rate is 60 the final price you actually pay is 80. This is assuming you can even buy foreign currency in the first place; people are limited to 200 USD per month.
- rchaud 7y ago
  Things like this is why I'm wary of looking too deeply into "data infographics", especially if they're related to economic statistics. The numbers alone rarely tell the whole story. They're still good for getting the "MBA-level" 30k ft view.
panarky 7y ago
This is the way data journalism should be done, kudos! > exchange rates are from Thomson Reuters Sorry to say I'm cynical enough to be surprised that they're allowed to republish this data.
- deleted 7y ago
  [deleted]
- hnews_account_1 7y ago
  Daily currency and stock data is practically free in most cases. Anyway, this is historical data and not real time. I don't think Reuters gives a fuck beyond your payment for downloading the data in the first place. Now if you piped the real time API to somewhere else for a broadcast / simple multicast, Reuters may take issue with it.
  - wyxuan 7y ago
    Yeah almost every brokerage provides access to historical exchange rates
- deleted 7y ago
  [deleted]
- jcranmer 7y ago
  In finance, the data is all public, and the algorithms are all secret. In oil, the data is all secret, and the algorithms are all public.
  - emptybits 7y ago
    I smiled at this. But, as I'm sure you know, historic data is public in finance. There is good business in keeping current data private to sell it.
p1necone 7y ago
I suspect the Big Mac index is not super informative in a lot of wealthier areas where the cost of shelter is growing much faster than the cost of food.
- hn_throwaway_99 7y ago
  I think I'm general inflation indexes are now completely impossible to generalize because (a) inflation has been enormous in some locales and some sectors but (b) the relative price of goods is now so dependent on location. That is, like you say, in a major city I'd expect a Big Mac to be only slightly more expensive, but I'd expect housing to be astronomical. But outside of probably like 10-15 major metros I'd expect housing to be flat if not negative in huge swaths of the US.
  - ghaff 7y ago
    To be at all useful, an inflation index almost has to ignore, say, the rental cost of a 1 BR apartment in the downtown or other sought after area of a relative handful of major cities. After all, in many cases, the same dynamics often don't apply even a 60-90 minute drive away. On the other hand, the fact that Big Macs and gallons of milk (or houses in Flint Michigan) haven't gone up much in price is more or less irrelevant to the young couple renting in Manhattan and looking for child care.
    - p1necone 7y ago
      Those few major cities make up a sizeable portion of the population though, you can't just remove them from the data and call it a day. Perhaps the solution is splitting it into a "high density inflation index" and "low density inflation index".
dontdoitpls 7y ago
Consumer pricing is the last to get hit with inflation. Why do people use CPI instead of labor, housing, or stock prices to gauge inflation? On a similar note, why would anyone trust the federal reserve's numbers given how the federal reserve has lied in the past?
- teruakohatu 7y ago
  It is easy to calculate. A gallon of milk today is essentially the same as a gallon of milk 100 years ago. Same with gasoline and cans of beans.
  - rory096 7y ago
    That's not accurate. CPI adjusts both in basket composition and the more nebulous hedonic quality adjustment. The TV you bought for $500 today is not the same as the one you bought for an equivalent price 30 years ago.
    - riffraff 7y ago
      it is actually very interesting to see the variations in CPI baskets. I recall, for example, when the standard basket in Italy used to contain Sambuca[0], and was updated in the '00s to instead include Limoncello[1] due to changed consumer habits. [0] Anise-flavoured liquor, often added to coffee https://en.wikipedia.org/wiki/Sambuca https://en.wikipedia.org/wiki/Sambuca [1] Lemon-zest flavoured liquor https://en.wikipedia.org/wiki/Limoncello https://en.wikipedia.org/wiki/Limoncello
- hnews_account_1 7y ago
  People actually in the field don't trust the CPI number as gospel. We all know its shortcomings. However, the CPI print does move the market, so while it is good to keep track of the real inflation number by our own methodologies (which generally involves a different weighing scheme since the real CPI already accounts for most consumer products), you hardly trade on it. For example, people have been shouting that inflation has already screamed past the Federal Reserve's target (of 2%) if the weight to medicare costs was increased to reflect the true spending of an average consumer(i.e. medicare is a bigger % of expenses of the avg consumer than reflected by the CPI weight). However, the fed refutes that argument and says that its current measure isn't perfect but neither is the solution proposed. Currently they are looking at something called the Stock Watson model to see if it provides a better gauge. So by no means is it a settled science.
yboris 7y ago
I bit of a shameless plug for my project: https://income-inequality.info/ https://income-inequality.info/ Includes all the processing and graph generation code (can even run notebook online): https://github.com/whyboris/Global-Income-Distribution https://github.com/whyboris/Global-Income-Distribution The world is shockingly unequal in terms of income (and other resources). I love that others are trying to visualize it (e.g. http://www.globalrichlist.com/ http://www.globalrichlist.com/ and https://www.givingwhatwecan.org/get-involved/how-rich-am-i/ https://www.givingwhatwecan.org/get-involved/how-rich-am-i/ )
crusty511 7y ago
Interesting that https://www.economist.com/news/2020/01/15/the-big-mac-index https://www.economist.com/news/2020/01/15/the-big-mac-index does not render with Privacy Badger + uBlockOrigin
- dekken_ 7y ago
  seems to for me
lowdose 7y ago
What would be a reason for irregular intervals of price registration? Could it be that the pricing changed by McDonalds at this interval and wouldn't the dataset be more complete to include the months in which the price of the Big Mac didn't change? 2000-04-01 2001-04-01 2002-04-01 2003-04-01 2004-05-01 2005-06-01 2006-01-01 2006-05-01 2007-01-01 2007-06-01 2008-06-01 2009-07-01 2010-01-01 2010-07-01 2011-07-01 2012-01-01 2012-07-01 2013-01-01 2013-07-01 2014-01-01 2014-07-01 2015-01-01 2015-07-01 2016-01-01 2016-07-01 2017-01-01 2017-07-01 2018-01-01 2018-07-01 2019-01-01 2019-07-09 2020-01-14
masayoshis_son 7y ago
The Big Mac Index is catchy but not particularly informative. I've found this crowdsourced comparison to provide much more insight: https://www.numbeo.com/cost-of-living/ https://www.numbeo.com/cost-of-living/
giorgioz 7y ago
I did use the Big Mac Index to convert the pricing of my SaaS in more than 40 currencies. I did the math in a simple Excel spreadsheet at the time. Will try the data from this repo next time I'll redo the pricing!
francisofascii 7y ago
Github has a helpful CSV file grid view that I never noticed before. https://github.com/TheEconomist/big-mac-data/blob/master/source-data/big-mac-source-data.csv https://github.com/TheEconomist/big-mac-data/blob/master/sou...

138 points by mkirchner 7y ago

I see Argentina's exchange rate is about 60 Pesos per 1 Dollar. While that's not false, the government recently imposed a 30% tax to all foreign currency purchases. So while the exchange rate is 60 the final price you actually pay is 80. This is assuming you can even buy foreign currency in the first place; people are limited to 200 USD per month.

rchaud 7y ago
Things like this is why I'm wary of looking too deeply into "data infographics", especially if they're related to economic statistics. The numbers alone rarely tell the whole story. They're still good for getting the "MBA-level" 30k ft view.

panarky 7y ago

This is the way data journalism should be done, kudos! > exchange rates are from Thomson Reuters Sorry to say I'm cynical enough to be surprised that they're allowed to republish this data.

deleted 7y ago
[deleted]
hnews_account_1 7y ago
Daily currency and stock data is practically free in most cases. Anyway, this is historical data and not real time. I don't think Reuters gives a fuck beyond your payment for downloading the data in the first place. Now if you piped the real time API to somewhere else for a broadcast / simple multicast, Reuters may take issue with it.
- wyxuan 7y ago
  Yeah almost every brokerage provides access to historical exchange rates
deleted 7y ago
[deleted]
jcranmer 7y ago
In finance, the data is all public, and the algorithms are all secret. In oil, the data is all secret, and the algorithms are all public.
- emptybits 7y ago
  I smiled at this. But, as I'm sure you know, historic data is public in finance. There is good business in keeping current data private to sell it.

p1necone 7y ago

I suspect the Big Mac index is not super informative in a lot of wealthier areas where the cost of shelter is growing much faster than the cost of food.

hn_throwaway_99 7y ago
I think I'm general inflation indexes are now completely impossible to generalize because (a) inflation has been enormous in some locales and some sectors but (b) the relative price of goods is now so dependent on location. That is, like you say, in a major city I'd expect a Big Mac to be only slightly more expensive, but I'd expect housing to be astronomical. But outside of probably like 10-15 major metros I'd expect housing to be flat if not negative in huge swaths of the US.
- ghaff 7y ago
  To be at all useful, an inflation index almost has to ignore, say, the rental cost of a 1 BR apartment in the downtown or other sought after area of a relative handful of major cities. After all, in many cases, the same dynamics often don't apply even a 60-90 minute drive away. On the other hand, the fact that Big Macs and gallons of milk (or houses in Flint Michigan) haven't gone up much in price is more or less irrelevant to the young couple renting in Manhattan and looking for child care.
  - p1necone 7y ago
    Those few major cities make up a sizeable portion of the population though, you can't just remove them from the data and call it a day. Perhaps the solution is splitting it into a "high density inflation index" and "low density inflation index".

dontdoitpls 7y ago

Consumer pricing is the last to get hit with inflation. Why do people use CPI instead of labor, housing, or stock prices to gauge inflation? On a similar note, why would anyone trust the federal reserve's numbers given how the federal reserve has lied in the past?

teruakohatu 7y ago
It is easy to calculate. A gallon of milk today is essentially the same as a gallon of milk 100 years ago. Same with gasoline and cans of beans.
- rory096 7y ago
  That's not accurate. CPI adjusts both in basket composition and the more nebulous hedonic quality adjustment. The TV you bought for $500 today is not the same as the one you bought for an equivalent price 30 years ago.
  - riffraff 7y ago
    it is actually very interesting to see the variations in CPI baskets. I recall, for example, when the standard basket in Italy used to contain Sambuca[0], and was updated in the '00s to instead include Limoncello[1] due to changed consumer habits. [0] Anise-flavoured liquor, often added to coffee https://en.wikipedia.org/wiki/Sambuca https://en.wikipedia.org/wiki/Sambuca [1] Lemon-zest flavoured liquor https://en.wikipedia.org/wiki/Limoncello https://en.wikipedia.org/wiki/Limoncello
hnews_account_1 7y ago
People actually in the field don't trust the CPI number as gospel. We all know its shortcomings. However, the CPI print does move the market, so while it is good to keep track of the real inflation number by our own methodologies (which generally involves a different weighing scheme since the real CPI already accounts for most consumer products), you hardly trade on it. For example, people have been shouting that inflation has already screamed past the Federal Reserve's target (of 2%) if the weight to medicare costs was increased to reflect the true spending of an average consumer(i.e. medicare is a bigger % of expenses of the avg consumer than reflected by the CPI weight). However, the fed refutes that argument and says that its current measure isn't perfect but neither is the solution proposed. Currently they are looking at something called the Stock Watson model to see if it provides a better gauge. So by no means is it a settled science.

yboris 7y ago

I bit of a shameless plug for my project: https://income-inequality.info/ https://income-inequality.info/ Includes all the processing and graph generation code (can even run notebook online): https://github.com/whyboris/Global-Income-Distribution https://github.com/whyboris/Global-Income-Distribution The world is shockingly unequal in terms of income (and other resources). I love that others are trying to visualize it (e.g. http://www.globalrichlist.com/ http://www.globalrichlist.com/ and https://www.givingwhatwecan.org/get-involved/how-rich-am-i/ https://www.givingwhatwecan.org/get-involved/how-rich-am-i/ )

crusty511 7y ago

Interesting that https://www.economist.com/news/2020/01/15/the-big-mac-index https://www.economist.com/news/2020/01/15/the-big-mac-index does not render with Privacy Badger + uBlockOrigin

dekken_ 7y ago
seems to for me

lowdose 7y ago

What would be a reason for irregular intervals of price registration? Could it be that the pricing changed by McDonalds at this interval and wouldn't the dataset be more complete to include the months in which the price of the Big Mac didn't change? 2000-04-01 2001-04-01 2002-04-01 2003-04-01 2004-05-01 2005-06-01 2006-01-01 2006-05-01 2007-01-01 2007-06-01 2008-06-01 2009-07-01 2010-01-01 2010-07-01 2011-07-01 2012-01-01 2012-07-01 2013-01-01 2013-07-01 2014-01-01 2014-07-01 2015-01-01 2015-07-01 2016-01-01 2016-07-01 2017-01-01 2017-07-01 2018-01-01 2018-07-01 2019-01-01 2019-07-09 2020-01-14

masayoshis_son 7y ago

The Big Mac Index is catchy but not particularly informative. I've found this crowdsourced comparison to provide much more insight: https://www.numbeo.com/cost-of-living/ https://www.numbeo.com/cost-of-living/

giorgioz 7y ago

I did use the Big Mac Index to convert the pricing of my SaaS in more than 40 currencies. I did the math in a simple Excel spreadsheet at the time. Will try the data from this repo next time I'll redo the pricing!

francisofascii 7y ago

Github has a helpful CSV file grid view that I never noticed before. https://github.com/TheEconomist/big-mac-data/blob/master/source-data/big-mac-source-data.csv https://github.com/TheEconomist/big-mac-data/blob/master/sou...