Pricele #45: Big Mac in South Korea 🇰🇷

The Big Mac is the most-quoted price in economics. The Economist started publishing its Big Mac Index in 1986 as a light-hearted way to test purchasing-power parity, the theory that a currency should buy the same basket of goods anywhere. Because the burger is close to identical everywhere it is sold, the gap between what it costs in two countries is a rough read on whether a currency is over- or undervalued.

Of the 45 countries priced for big mac, South Korea ranks #36 from the top at $3.74, 32% below the median of $5.53.

South Korea has notably expensive fruit. Tariffs and quarantine rules restrict imports of many fresh products, and domestic orchard land is limited, so apples cost several times what they do in producing countries. Prepared food and transport, by contrast, are cheap for a high-income country. VAT is a flat 10% with basic unprocessed foodstuffs exempt, so tax explains almost none of the fruit premium. It is border policy and land, not the till. Korea is the strongest case in the table for reading a single item's price as a story about trade rules rather than about the general cost of living.

See the full table for big mac in every country or everything priced in South Korea.