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Korea ranked 16th among 47 nations in the ¡°Big Mac index¡±, which seeks to establish the real value of currencies in major countries based on the price of the McDonalds burger.
According to the Economist, a Big Mac in Korea costs US$3.14 based on last Monday¡¯s won-dollar exchange rate. Among the 47 surveyed countries, it was the most expensive in Iceland at $7.61, followed by Norway with $6.88, Switzerland with $5.20, Denmark with $5.08 and Sweden with $4.86. Eurozone member nations came in sixth with an average price of $4.17.
A Big Mac in China was the cheapest at $1.45. Hong Kong with $1.54 and Malaysia with $1.60 also ranked among the cheaper nations. The Economist explained that according to the Big Mac index, Iceland¡¯s currency is overvalued by 123 percent against the dollar. The won and the yuan are undervalued by 8 percent and 58 percent against the greenback respectively, based on the index.
However, the business weekly said while the Big Mac index is useful to predict long-term foreign exchange rate, since other factors such as labor costs or housing costs are reflected in the price of burger, the index is more useful comparing nations with similar development levels.
(englishnews@chosun.com )
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