The Big Mac Index is so famous that most people stop there. But there's a surprising number of "single-product indices" built on the same idea — the Starbucks tall latte, the iPhone, a Netflix subscription, even a single can of Coke. They all ask one question: why does this near-identical item, sold everywhere on Earth, print such different prices country to country?

As the maker, while handling the Big Mac game data, one thing kept nagging me. The moment you hold up a single burger and recite a line like "the Korean won is 30% undervalued," you've handed the whole verdict over to the circumstances of that one hamburger. Beef prices, store rent, local labor — all of it is dissolved inside the Big Mac, and calling that "currency value" is a bit risky. So I think it's better to lay the alternative indices side by side.

The appeal of judging a country by one product

The reason these alternatives are loved is simple. With one standardized product, you can feel two countries' prices intuitively without ever staring at an exchange-rate table. A Starbucks tall latte is roughly the same cup size and recipe everywhere. An iPhone, model for model, is effectively the same machine. The Netflix standard plan has the same resolution and number of simultaneous streams. The starting line for comparison is clean.

Real reported cases make it land. In the Starbucks latte index, the perennial expensive end is Zurich, Switzerland, where a tall latte has been reported above $6 a cup more than once. The same latte runs $2–3 in some Southeast Asian cities. The iPhone index is even more dramatic: for the same new model, countries with heavy import tariffs and taxes — Brazil, Turkey — sell it far above the U.S. list price. That's why reports once pegged Brazil's iPhone at nearly double the U.S. price.

And that's exactly where the trap is

What the iPhone index shows isn't currency value. It's that country's tariff and tax structure. Brazil's iPhone is dear not because the real is overvalued, but because the taxes layered onto imported electronics are brutal. A Big Mac is mostly made and sold locally; an iPhone is mostly an import. That single difference splits the two indices into completely different animals. Discussing exchange rates via the iPhone index means mistaking tariffs for currency.

Netflix is a different trap. Its price isn't set by converting production and licensing costs through an exchange rate — it's set at whatever that market will bear. India's mobile-only plan costs a fraction of the U.S. plan not because the rupee is that weak, but because that's the price at which subscribers actually sign up. Even identical content gets marked down to match purchasing power and competition. Read it as a purchasing-power index and you're half right, half wrong.

The Starbucks latte index has its own shadow: brand premium. In some countries Starbucks is just a café; in others it's positioned as a slightly pricey lifestyle purchase. The same tall latte is deliberately marked up in the latter. So a pricey latte means neither that everything in that country is expensive nor that its currency is overvalued.

Which is why you overlay them — one comparison table

Here's the core claim: compare countries with a single product and you get fooled by that product's quirks. The Big Mac carries beef and rent; the iPhone carries tariffs; Netflix carries price discrimination; the latte carries brand premium. Each index distorts in a different direction. So even when one index points to Korea as undervalued, you should pause unless another index points the same way.

Take Korea, for instance. On the Big Mac Index the won tends to read cheap against the dollar. Yet the iPhone is frequently more expensive in Korea than in the U.S. Same currency, two indices pointing opposite ways. That's not a contradiction — it's normal. The Big Mac mirrors food prices; the iPhone mirrors electronics taxes and distribution. Only by overlaying the two pictures do you get the three-dimensional outline of "a country where food is cheap but imported electronics are pricey."

So what's the real yardstick?

The most precise measure is purchasing power parity (PPP) as computed by the OECD, the World Bank, and the IMF, using a broad basket of hundreds of items — bread, transport, healthcare, telecom, and more. If a single-product index is one hamburger, official PPP fills the whole shopping basket for the comparison. That's how OECD PPP structurally sidesteps the "one product's quirks" trap that single-product indices fall into.

Granted, official PPP is less intuitive. So here's how I actually use it: reach for a single index — Big Mac, latte, iPhone — as the entrance to a quick gut read, then cross-check against OECD PPP or several overlaid indices before drawing any conclusion. Don't just transcribe the number one index shouts. That's the whole discipline.

To be clear, none of this is investment advice to buy or sell any currency or asset. It's an interpretive, educational note for grabbing the abstract numbers of exchange rates and prices through a single product. A single index makes a fine entrance but a shaky conclusion.

If you want to feel for yourself how differently one product prints across countries, pitting two nations' Big Mac prices against each other in the Big Mac Index quiz builds that instinct fast.