A Norwegian Big Mac costs $ 6.30, which puts Norwegian McDonalds Restaurants in the second place, behind Switzerland, where a Big Mac costs $ 7.54. But when Big Mac prices are compared with income (GDP per capita) in each country, Norway falls down to the 23rd place.
Big Mac index was created in 1986 to show whether a country’s currency is over- or undervalued. The index is based on the theory that similar goods should approach each other in price over time ( purchasing power parity ). The world famous hamburger is a commodity that is very similar worldwide. Therefore many believe that it is suitable for comparisons among countries.
The index shows that a Norwegian Big Mac is 31.46 percent more expensive than an American burger (which also costs $ 4.79).
So the index suggests that the Norwegian krone is 31.46 percent overvalued against the US dollar.