Pricele #63: Big Mac in Costa Rica 🇨🇷

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, Costa Rica ranks #18 from the top at $6.04, 1.1× the median of $5.53.

Costa Rica is conspicuously expensive for Central America, and the reasons are structural rather than fiscal: a small domestic market, wages well above its neighbours, and most manufactured goods imported. Its VAT has the most finely graded ladder in this table, running from 13% standard down through 4% for private health, 2% for medicines and 1% for goods of basic consumption, which means the headline rate says very little about what any particular item carries. Electricity is close to fully renewable and priced by a regulator rather than a market, so it moves in steps rather than with fuel.

See the full table for big mac in every country or everything priced in Costa Rica.