Converting the price of every house into Big Macs—A book that reviews itself

“A problem faced by any book discussing affordable residential construction is the international comparability of costs. Due to the different constructional requirements, it was not possible to precisely calculate the costs within the scope of this book. Yet a universal indicator of whether one was able to afford the house in one’s home country had to be found. One option would have been the per capita income (before / after taxes), but the respective disparity of incomes would have distorted this figure. The conversion of national prices into a currency such as the US Dollar would have been too imprecise—overvaluation and undervaluation of currencies would have favored individual countries, while the relationship of the costs to the income of the buyers would have been lost. Thus a currency was sought and found that is internationally available and comparable, while being largely independent of political and fiscal models—the Big Mac.

Introductory page to chapter one: Houses that cost up to 300 Big Macs for a square meter
Introductory page to chapter one: Houses that cost up to 300 Big Macs for a square meter

“Based on a survey of the British periodical ‘The Economist,’ the average cost of the burger in many countries around the globe is known since 1986. The index was conceived by Pam Woodall and serves the purpose of facilitating the understanding of exchange and purchasing power parity rates, as well as overvaluation and undervaluation of individual currencies. The surveys of Van Spronsen & Partners were used to determine the price of Big Macs in the individual countries of the euro area, which ‘The Economist’ lists as a compound item. Since the Big Mac is a standardized product, its price is internationally comparable. It is largely produced with local raw materials and local manpower, just like a house.

“What’s more, it is not a luxury product but can be afforded by practically anyone—just like a low price house. This is why behind the price of every house the conversion of the amount into Big Macs according to the index of 2009 is also listed. The upper range of a low price house was set at 42,000 burgers, which results in a rounded price ceiling of 272,000 SFR for Switzerland, of 150,000 USD for the United States, and 14,000,000 YEN for Japan. While a house in Norway could cost up to 204,000 Euro, the limit in the Czech Republic was 102,000 Euro (and in Slovakia only 100,000 Euro). This price ceiling applies to the house alone without interior finishing and land costs.

“The number of burgers also dictates the chapter divisions, this time in relation to the square meters—the categorization of up to 300, 300-600 and more than 600 burgers / square meter divides the buildings into categories ranging from affordable space saving miracles to precious little gems. The absolute number of burgers was then used to additionally subdivide the chapters.”

–from Low Price Houses by Chris van Uffelen, published by Braun Publishing AG, www.braun-publishig.ch, 2011

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.