Every year, international affairs magazine The Economist uses their Big Mac Index to compare the buying power of currencies in different countries. Unlike normal exchange rates, the premise of the Big Mac Index is that the same products in two different countries should cost the same when converted to the same currency. Using a Big Mac—a product that is pretty much the same no matter where you are—they calculate the actual purchasing power of a given currency. The results gives an indication of whether or not a particular currency is over or undervalued. According to the last index released last fall, Canada’s dollar was being exchanged for about 15 per cent more than it was actually worth.
When McDonald’s milkshakes were chosen as the best in our Best of Food & Drink Readers’ Survey, we called around to find the cost of large vanilla Triple Thick Milkshakes around the province and discovered the price fluctuated quite a bit. Which is weird, because they’re pretty much the same no matter where you are.
So we concocted our own Milkshake Index.
Because the currency is the same, we decided to use the term “Food Dollars” instead. These Food Dollars are based on the regional costs of a Nutritious Food Basket (a week’s worth of food for a family of four) according to the Department of Health and Community Services, the NL Statistics Agency, and regional dietitians and nutritionists (More info from the Food Security Network of NL).
So what does this all mean? The Big Mac Index, using national currency exchange rates that are determined by market forces, tries to give an indication of the real value of a dollar, dinar, drachma, or deutsche mark. Our Milkshake Index, on the other hand, is trying to give an indication of the value of a dollar’s worth of food in different areas.
The results tell us that it is probably best to spend your Food Dollars on foods other than a milkshake everywhere other than Carbonear and Labrador City, where it seems to make the most economic sense to have a milkshake for supper, because it’s relatively cheaper than other food.