Beeronomics Ousts Burgernomics

Pivotfarm's picture

Click here to follow ZeroHedge in Real-time on FinancialJuice

Everybody knows of the light-heartened Big Mac index that the boys at The Economist thought up in 1986 in an idle moment as a yard stick for comparisons between countries around the world. But now, Burgernomics has just turned into Beeronomics today and Ronald McDonald would probably end up much rather having a cold beer (or warm beer if it’s in the UK, or is that just a myth?). Ronald was getting too much or a porker anyhow. It’s better to drink these days too; there are enough around the world that need to drown their sorrows.

Robert A. Ferdman and Ritchie King of the Quartz have brought us into the age of Beeronomics by inventing the Beer Index. They used the yardstick of a 0.5L of draft beer on sale at a bar or a restaurant around the world. Well, they didn’t actually do anything apart from combine a list of prices of beers around the world that are available from Numbeo (a crowd-source database) and the monthly minimum wage data that is published by the International Labor Organization (ILO). They did a few calculations and came up with the Beer Index. Sobering a story if ever you have heard one.

Divide the price of the beer that any local in any country in the world has to pay by the hourly minimum wage and hey presto as quick as the froth on your beer disappears in the frosted glass, you get the average number of hours you would have to work for you to get to buy a local beer down the boozer. The idea came from The Economist once again that produced the same index in September 2012 in time for the Oktoberfest Beer Festival in Munich. But, The Economist only used a limited number of countries (27) and decided to use the median wage rather than the average monthly wage. Quartz’s study uses 91 countries.

So, the best place to work and where you can drink yourself to the ground quickly and effectively on local beer? Puerto Rico. You can get a beer after just 12 minutes of work, which is frightening since that means that there are some that could get a beer after just a couple of minutes or even seconds of sitting at their desks.

• In the USA you would need to work double that and only end up with one after 24 minutes. 
• In the UK, the land of pubs, you would have to work 30 minutes.
Georgia would be the worst place to go for a drink with your colleagues after work as you would have to put in more than 15 hours to get 0.5L of the amber nectar. 
• The Chinese have to work 72 minutes.

Whatever next will we have that will be able to be downed by economists around the world? We shall end up with 20 academic papers now on the viability of using such Beeronomis today and it might not become a global standard, but there will be others that start up the Champagne Index or the Whatever-You-Like Index.

Purchasing-Power Parity serves at least to tell us that a currency is undervalued and that can be important, especially when January 2014 saw that a Big Mac in the USA cost $4.62 while in China it was only $2.74, meaning that the Chinese currency was undervalued by 41%. But, there’s nothing new in that. Are these indexes really worth the time they take for bored economists to think up and work them out?

What these indexes prove is that we live in the age of the scientific researcher that needs a number or a statistic to prove his point and to become believable. We have world clocks for everything; we check the rise and fall of this and that day in and day out. Mark Twain once said that “facts are stubborn, but statistics are pliable”. We all know that statistics are as pliable as anyone wishes, especially in today’s digital, fast-paced world.

We can show anything we wish with statistics, but perhaps economists might be looking at other things that are more than in need of attention, rather than playing d(r)aft-beer games.

It doesn't say a lot for our percepetion of the world if we have reduced oureconomies to burgers and beer, does it?

That's fast, fattening, addictive, too sugary, too sweet

Originally posted: Beeronomics Ousts Burgernomics

Click to solve todays trader Puzzle