The travel cost dashboard highlights the relative expense of traveling in different
countries, compared to a chosen base country. Currently, you can select either the USA,
South Africa, or the Big Mac Index (BMI) as your reference point, with more options to
be introduced soon.
Our calculations are based on two key data sources: exchange rates and Purchasing Power
Parity (PPP), and now, the Big Mac Index (BMI). Here’s an example from August 12, 2024,
to illustrate the process:
According to PPP data, R100 in South Africa has the same purchasing power as £9.3 in the
United Kingdom. However, at an exchange rate of £1 to R23.33, you would need R217 to
obtain £9.3. This means that what costs R100 in South Africa would require R217 in the
UK. Thus, travel in the UK is 117% more expensive than in South Africa (R217 vs R100).
Data Sources and Updates:
Live Exchange Rates: For the current year, we use the latest exchange
rate updated weekly. For previous years, we use the average annual exchange rate as
provided by FastForex.
PPP Data: The PPP values are sourced from the OECD (available at
data.oecd.org). This provides a standardized measure of the relative value of currencies
in terms of their purchasing power over a standard set of goods and services. Where PPP
data has not
been updated for the most recent year, we use the previous year.
Big Mac Index (BMI): The BMI data is sourced from The Economist,
which provides a comparison of the price of a Big Mac across different countries. This
index serves as a light-hearted but often insightful indicator of exchange rate
valuation and purchasing power parity. When selected, BMI is used as the reference for
comparing travel costs.
By using these methodologies, the dashboard offers a detailed and up-to-date analysis of
travel costs, aiding travelers in making informed decisions based on the latest economic
data.
