Thursday, November 24, 2011

Manipulating the Big Mac Index

At a recently renovated mall in the upscale Recoleta neighborhood [of Buenos Aires], the McDonald’s is immaculate. ...

But reading the brightly lit menu behind the cash register, it appears that something missing: The Big Mac. McDonald’s signature sandwich is not prominently advertised. Down the hall toward the bathroom there is a price list that includes a picture of the Big Mac down near the bottom.

Why is McDonald’s downplaying the world’s most famous burger? ...

At 20 pesos, the individual Big Mac is at least 4.50 pesos cheaper than the list price of comparable options. ...

The relatively inexpensive Big Mac has become an open secret in Argentina, spurred by media attention and discussions on social networks. It is being used as Exhibit A by government critics to explain how the government pressures businesses to keep certain prices frozen and manipulates economic statistics in its interest. There is widespread speculation that the government is trying to influence The Economist’s famous Big Mac Index, a “lighthearted” guide that compares burger prices across the globe to determine whether a currency is under- or over-valued. ...

And downplaying the Big Mac would seem to be McDonald’s way of selling as few as possible. ...

The national statistics agency says the inflation for the 12 months through October was 9.7 percent. But private economists insist the real figure is more than double that number. Independent experts agree the widely discredited government statistics agency has been fudging consumer-price data for years for political gain and, to a lesser extent, to lower inflation-linked debt payments.
--Daniel Politi, International Herald Tribune, on the price of being a signature global commodity