By Troy Stiles, ISA Customer Communications Manager
“Can a hamburger help me figure out where to study abroad?” That’s an odd question, isn’t it. But maybe that beef patty is good for more than just eating. Okay, so maybe a regular old hamburger can’t help us answer this question, but maybe a Big Mac can.
A Big Mac? What does this have to do with study abroad? Great question.
Honestly, a Big Mac doesn’t really have anything to do with study abroad, but more with the overall power of currency in comparison with one another.To help answer this question we need to take a look at the Big Mac from the standpoint of purchasing power parity.
Purchasing Power Parity (PPP) is simply a measure of the purchasing capabilities of currencies. In other words, PPP compares how much one currency can buy compared with how much another currency can buy.
In this instance, we’re wondering how many Big Macs can one currency purchase compared to how many Big Macs can another currency purchase.
Everyone knows that McDonalds is a master of consistency. That’s part of the reason people love McDonalds, they know what they’re going to get, no matter where they are. A McDonalds hamburger in the Frankfurt airport is going to be the same as a hamburger in Lima, Peru and we know that a Big Mac in Denver, Colorado is going to be the same as a Big Mac in Sydney, Australia.
What does this mean?
Over the past several months/year, the US Dollar has been gaining strength compared to other foreign currencies, meaning its purchasing power has been increasing (i.e. 1 US Dollar can buy more of a Big Mac than it could compared to 1 Euro last year).
What does this mean for you, the American college student looking to study abroad? Well, essentially it means that Americans who travel abroad will be able to get more for their money. And the last time I checked, that’s a good thing. So, as an example, if we’re comparing the US Dollar and the Euro – if the Dollar can buy more Big Macs than the same number of Euros, it should be able to purchase more of everything or at least most everything. Right?
As we all know, study abroad is about….studying….abroad, as in, some place other than the United States. Taking a quick look at the Economist’s Big Mac Index (yes, it’s an actual thing), we can see that the US Dollar is valued higher than nearly every currency in the world except for 5 countries.
So, let’s look at this in terms of what this means for someone looking to study abroad and how this can help you.
Save Some Cash
First of all, the strong dollar has been a factor in helping ISA to be able to reduce prices to certain programs (See Pacific Region Program Prices). The cost of certain programs have been reduced, in part, because the value of the US Dollar stretches further than it did even just last year.
Another way that a strong dollar is a good thing for people who choose to study abroad is that the cost of extracurricular travel and activities may be cheaper or seem cheaper. For example, a €50/night hotel in May 2014 would have cost more in US Dollars than it did in May 2015, based on exchange rates. As an example, the €50/night hotel might have cost $50 US Dollars in 2014 and now it only costs $43 US Dollars (remember, this is only an example).
While the $7 in savings isn’t a ton of extra cash, a few dollars here and a few dollars there can really add up over the course of a few weeks or a semester program.
So, whether you’re looking to study abroad in Europe, the Pacific, or any other part of the world, you might want to keep in mind not only where you will have the best experience possible, but where will you get the most for your money.
Based on recent exchange rates, your dollar will stretch further than it has in a long time.
Why is this good?
It’s good because it means instead of getting a shared room at a hostel, you might be able to get a private room. It’s good because it means possibly being able to afford that pair of gloves and a scarf you want, instead of just the pair of gloves. And it’s good because it may mean something as simple as being able to splurge one day and get that special local delicacy instead of just a Big Mac.
To learn more about study abroad options with ISA, check out the ISA website or contact a Student Services Advisor at (512) 480-8522.