Accroding to recent articles in the Times of India and Hi Pakistan it was found that a McDonald’s burger costsIndian-Rs10 but Pakistani-Rs100. This has caused some concern in Pakistan and some glee in India.
As this sounded in the realm of burgernomics I decided to study the implied PPP of South Asian currencies using The Economist magazine as the ‘basket of goods’ for comparison. Here’s my very own South Asian Big Economist Index:
While this chart reveals that most South Asian currencies are about 33-40% undervalued against the US dollar, it also reveals that the Economist magazine is most expensive in Pakistan. Its the cheapest in Sri Lanka, followed by India.
Back to the burgers, it appears that the differential pricing of McDonald’s burgers in Pakistan is not influenced by foreign exchange ratios, but by more basic economics. McDonald’s burgers are probably seen as ‘luxury’ goods in Pakistan, while they seem to have become high-end commodities in India. Also, the Rs 10 burgers in India are likely McVeggie and McAloo vegetarians, while the Rs 100 burgers in Pakistan could be the meaty cousins.
This post was featured in the 37th Bhartiya Blog Mela hosted by Jegan Kingsley