Israel Ranks Second Most Expensive for Big Mac Globally After Switzerland

Israel ranks second worldwide in the Economist magazine's Big Mac Index, which marks its 40th anniversary by comparing purchasing power parity through the price of a Big Mac in McDonald's restaurants across countries. The index, published since 1986, uses the U.S. Big Mac price as a baseline to assess whether currencies are undervalued or overvalued against the dollar. Currently, the average Big Mac price in the U.S. is $6.22, while in Israel it is $7.67 when converted to dollars, making it the second most expensive after Switzerland, where the burger costs $9.04.

However, converting the U.S. price into Swiss francs yields only 5.02 francs, enough to buy about 70% of a Swiss Big Mac, indicating the Swiss franc is overvalued by 45% relative to its purchasing power. Similarly, the Israeli shekel is overvalued by nearly 40% based on local Big Mac prices. Following Israel, the UK ($7.40), the European Union ($7.08), and Turkey ($6.91) have the next highest prices.

Conversely, the lowest Big Mac prices are found in Indonesia ($2.38), Taiwan ($2.42), and India ($2.45). This means the U.S. Big Mac price could buy two and a half burgers in Taiwan. The Economist explains that price differences stem from factors such as tariffs, transportation costs, lack of competition, and variations in ingredients, labor, rent, and electricity expenses.

Supporting these findings, a Deutsche Bank report released last month identified McDonald's prices in Tel Aviv as the highest worldwide.