Scandinavia's Big Mac Index

Posted by Lisa Sabol-Sikorski Mar 1, 2007

Every year, the Economist publishes its’ Big Mac index. The philosophy behind the index is that the price of a Big Mac is an equalizer representing the purchasing power of different currencies, including those in Scandinavia. The Economist researched the price of a Big Mac in 46 different countries and compared those prices to the price of a Big Mac in the US.

Not surprisingly, the Icelandic kroner is the most overvalued currency based on this index, which is 131 percent overvalued when compared to the US dollar. The most undervalued currency in the list is the Chinese yuan, at 56% below the dollar. Other Scandinavian countries faired slightly better than Norway, but all of them are overvalued compared to the dollar using this index. In second place out of 46 countries is the Norwegian kroner, at 106% above. Currencies in Denmark and Sweden were slightly less overvalued, at 50% and 43%, respectively. The euro zone amounted to being only 19% overvalued while newer European Union members like Poland and Estonia came in at 29% and 23% undervalued when compared to the US dollar.

What does this mean for the traveler? According to this measuring stick, Norway, Sweden, Denmark, and Iceland are the more expensive travel destinations in the world. Be prepared for sticker shock for everything from a cup of coffee, to an Icelandic wool sweater, and everything in between. But, you only live once, and seeing the northern lights, staying at the Swedish Icehotel in the Arctic Circle, riding Icelandic horses in Iceland, taking a sauna where they were in invented, and traveling through the majestic fjords of Norway are such unique experiences, so spending a little bit of extra money to do these things is worth it, in my humble opinion.