How much are you paying for a burger?

A study released by UBS bank compares the cost of living in different cities based on the average number of minutes required to work to afford a BigMac at local market prices. At the very top of the results is Tokyo, where average wages mean 10 minutes of work equals one Big Mac. Unfortunately it doesn’t look like they included Vancouver in the study (come on guys! we’re world class!), but in Toronto the average wage means 14 minutes of work to buy the burger.

Tokyo scored at the top of the survey, which aims to eliminate variables such as exchange rates, even though it is one of the most expensive cities in the world, UBS said in the Prices and Earnings report released Wednesday.

“Wages only become meaningful in relation to prices — that is, what can be bought with the money earned,” it said.
The bank calculated the “weighted net hourly wage in 14 professions” and divided it into the local price of “a globally available product,” for which it chose McDonald’s flagship hamburger.

It seems very strange to me that even though they have the highest purchasing power, a graph of Tokyo land prices over the last 20 years looks like this:

What happened there? Maybe there is no fundamental link between real-estate prices and local market earning power. Another example: the price of an average house in Vancouver will get you two average houses in Toronto, but the average income in Toronto is higher than Vancouver. For 2004 statcan says average family income in Toronto was 60,100 while in Vancouver it was 56,200.

Obviously income is not the only factor in local market value, but how much are we betting that future demand will hold if local economic factors don’t change dramatically?

oldest most voted
Inline Feedbacks
View all comments

anon 11:28-

Between 1955 and 1990, land prices in Japan appreciated by 70 times and stocks increased 100 times over. Trading became the national sport, and the Japanese jumped into the market with more blind confidence than that of the Americans of the 1920s. During the eighties, large Tokyo firms were worth more individually than all their American counterparts combined, and Japanese golf courses were worth more than the value of all the stocks on the Australian exchange. other words people got swept up in the mania and since they had already gone beyond the point where everything should have crashed they figured it never would.


Hmm.. That's kind of astounding, those are the kind of property economics that make sense. What are they doing in London to make all that money?


The statistics that show that the average house in the GTA is half that of GVA is a bit misleading. The GTA is a much much larger area than the GVA. If you compare the proper city of Toronto, which is about 2.5 million people you find that the price for a house is just as nuts. The reality is that you have to move way outside of Toronto (a 2-3 hour drive during weekdays) to get the most attractive prices.Now if you want a more interesting comparison check out London, Ont. It has an income greater than that of even the GTA (on par with Victoria), yet the average house price is still under 200K. So you can get over three homes in London, of the price of one here and you have a much larger lot to boot.


What happened in Tokyo to cause that crash and why hasn't it recovered yet? It seems if prices dropped by that much and they have high incomes land values would be higher by now.Anybody know what happened there?


The reason Vancouver wasn't on that study is because we don't buy Big Mac's here. All our money goes into our mortgages.