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Day December 20, 2011

The big Mac (and iPad and iPhone) index (Updated)

Apple’s products are globally consistent. They sell the same exact[1] product in all countries. An unlocked iPhone is the same everywhere. It makes the products “liquid” in that they can be easily bought and sold across borders.

However, laws do not permit the import and friction-free trading of electronic products. In addition to regulations there are duties levied and there are sales or consumption taxes levied on the purchase.

However, knowing the retail price of an Apple product in a particular location, and knowing the tax and duties levied, can we work out if the price is consistent?

Here is an example:

I illustrated the price of a basket of Apple products in the US online Apple store