This index has been constructed since 1986 by the Economist. Basically, it's a light-hearted way to measure something called the purchasing power parity (PPP) between countries.

Purchasing power parity is an economic theory that in the long term, in the absence of transaction costs and official barriers to trade, identical goods will have the same price when expressed in a common currency. In this case, the identical good is a Big Mac and the common currency is the US dollar.

Here's how it works. By comparing the price of a Big Mac in various countries, converted into US dollars, you get an idea if a currency is under or overvalued versus the US dollar.

Of course, this is a very crude measure and shouldn’t be taken too seriously. Currency markets are complex and there are multiple factors than determine an exchange rate. But it is interesting nonetheless.

Music: Another Day Gone by Damma Beatz, Epidemic Sounds