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The Truth About Big Mac Inflation

Inflation is everywhere, and fast food is no exception.

In this article, we take a look at how inflationary pressures have impacted the price of the Big Mac, and how recent changes to the Economist’s Big Mac Index paint a different picture to reality.

Taking inspiration from this Axios study, we also do a deep dive into how affordable a Big Mac is in each state.

Click here to jump to the interactive Big Mac State Map that shows regional differences in Big Mac prices and affordability.

US Big Mac Prices (In July 2022 Dollars)

The Economist Big Mac Index tracks the price of a Big Mac in over 50 different countries (including the USA).

What was originally a ‘lighthearted guide’ has turned into a widely used economic benchmark that some countries have been accused of manipulating.

Up until July 2022, the method for calculating the price of a US Big Mac was simple:

“Previously, we averaged the price from four major US cities”

The Economist

But in July 2022, The Economist switched to using a McDonald’s provided price for the United States.

Here’s the impact of this change:

MetricPrice (July 2022)YoY %
Original Methodology$5.77+7.9%
New McDonald’s Provided Price$5.15-3.7%

Why is this important?

  • The new figures show the Big Mac being the cheapest on record since 2012, despite widespread and obvious price increases.
  • US Big Mac inflation is +7.9% using the original methodology, but the tracker is instead showing deflation of 3.7%.
  • This also raises questions about using the Big Mac Index as a currency comparison tool, with the USD potentially being overvalued using the new methodology.

Note: historical figures using the new McDonald’s provided price have not been included in the Big Mac Index

Key Headlines

  • A Big Mac is least affordable in the Southern state of Mississippi (where it also happens to be the cheapest). West Virginia and Alabama are close runners-up.
  • Despite D.C. having the most expensive Big Mac, it’s also the area with the most affordable burger, followed by Massachusetts, and Connecticut.
  • In general, the states with the cheapest Big Macs are also the states with the least affordable Big Macs and the lowest disposable incomes.

Big Mac State Map

The price of a Big Mac varies across America, but the difference is only ever going to be a few dollars.

While the difference in the highest and lowest disposable incomes across the US is just over $50,000.

The upshot?

States like Mississippi with a low disposable income are going to struggle to afford even the cheapest Big Mac. And areas with high disposable incomes (like D.C.) won’t have any trouble paying over $6 for a Big Mac.

There are of course some exceptions.

Take Hawaii as an example.

It has the second most expensive Big Mac (due to the fact it’s an island) but doesn’t have the disposable income to match, so it ranks low on the affordability scale.

Cheapest Big Mac States

The following table shows how each state compares in terms of Big Mac prices. A price index of 90 means that the Big Mac price is 10% cheaper than average (methodology).

wdt_IDStatePrice Index
1Mississippi89.10
2Arkansas90.00
3Alabama90.90
4Missouri90.90
5South Dakota90.90

Most Affordable Big Mac States

The following table shows how each state compares in terms of Big Mac affordability. An affordability index of 110 means that a Big Mac is 10% more affordable than average (methodology).

wdt_IDStateAffordabilityDisposable Income
1District of Columbia145.881,193
2Massachusetts124.269,137
3Connecticut124.069,035
4California116.764,994
5New Hampshire115.464,229

Disposable Income VS Big Mac Price

The cheapest Big Macs can be found in the states with the least disposable income and vice versa.

This makes a lot of sense when you break it down.

Higher disposable income is a direct result of higher wages.

And higher wages mean higher labor costs for fast food joints like McDonald’s. In order to cover these labor costs, prices go up.

It’s a chicken and egg situation.

What’s happening with other fast food joints?

It’s not just the Big Mac that’s getting more expensive.

Other companies are also increasing prices or using shrinkflation to offset surging costs.

  • Domino’s Pizza reduced the number of wings in its $7.99 deal from 10 to 8. (source – Jan 2022)
  • Burger King has reduced its 10 nugget meal to an 8 nugget meal in some locations and pulled the famous Whopper from the discount menu (source – Feb 2022)
  • Starbucks reveals plans to raise prices further in 2022, after previously raising them in October and January (source – Feb 2022)
  • KFC went viral on TikTok after one user called out its expensive menu prices, with a 16-piece meal costing nearly $60 (source – March 2022)
  • In the UK, Mcdonald’s raised the price of its cheeseburger 20% – the first price increase in 14 years (source – July 2022)
  • Chipotle plans to raise prices for the second time this year in August “in the mid to high single digits” (source – July 2022)

Press & media enquiries

For any press and media enquiries, or for access to any specific base data, please contact Veronica at [email protected].

Methodology & Sources

Big Mac Price By Year: Big Mac price figures have been obtained from the official Economist GitHub repository for the Big Mac Index. This includes both the original methodology and the new methodology.

Dollar values for prior periods have been adjusted for inflation using the CPI Inflation Calculator.

Average Big Mac Price By State: State-level Big Mac prices have been obtained from a combination of our own firsthand research and fastfoodmenuprices.com. These figures were converted into a price index, with the median US Big Mac price showing as 100.

A Big Mac that costs 10% less than average is shown on the price index as 90.

Big Mac Affordability: We obtained state-level, per-capita disposable income figures from the US Bureau of Economic Analysis (released March 2022). We then compiled an ‘affordability index’ using both the average US disposable income ($55,671) and the average Big Mac price.

An index value of 90 shows that a Big Mac is 10% less affordable than the national average.

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