Pricele #82: Big Mac in Italy 🇮🇹

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, Italy ranks #10 from the top at $7.05, 1.3× the median of $5.53.

Italy runs close to the eurozone average on groceries but below it on café prices. An espresso taken standing at the bar is still priced at a level many Italians treat as near-fixed, and that convention holds cappuccino prices down relative to northern Europe. Basic food carries just 4% IVA against a 22% standard rate, one of the largest such gaps anywhere in the EU. Italy is therefore a country where the state has decided, in tax law, that groceries are close to untaxable, and the cappuccino convention is a second, entirely informal version of the same instinct applied to coffee.

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