Given its varying price points throughout the world, how much in USD would it actually cost to buy the world a Coke? originally appeared on Quora - the knowledge sharing network where compelling questions are answered by people with unique insights.
Answer by Kynan Eng, Tech startups & research: neuromorphic engineering, mobile big data, VR, on Quora.
It will cost approximately USD 6.82B to buy every living human in the world a local Coke.
It is very hard to find standard prices for Coke all over the world, especially since there is high variation even within one city depending on where you buy it (supermarket, restaurant, etc.). A big simplifying assumption is to buy everyone a small Coke from McDonald's (ignore the fact that the drink sizes vary around the world). A good starting point is the following data, current as of early March 2016:
- The Economist lists prices of Big Macs in many countries, including local currencies and exchange rates to USD
- List of countries and dependencies by population
- List of countries by GDP (nominal) per capita, listed in USD (I took the IMF figures)
First, we work out how much it will cost to feed the world a Big Mac. The Economist list of Big Mac prices covers about 5.47 billion people, which is about 74.9% of the world's population. Feeding these people Big Macs would cost $14.97B. However, it would be a mistake to simply scale up linearly to a world figure of $19.99B, since poor countries probably have cheaper Big Macs.
How do we estimate the price of buying everyone a Big Mac, even in countries where there is not (yet) widespread adoption of McDonald's? To estimate this, we can first extend the country list to include the world's top 50 most populous countries (which are all poor). With this, we reach 6.61 billion people, or 90.44% of the world's population. Then we can note that there is a roughly linear relationship between nominal GDP per capita and the price of a Big Mac, on a log-log scale (note: the outlier Venezuela has been removed, as its economy is currently collapsing):
This information allows us to estimate the price of a Big Mac in countries which don't yet have McDonald's. Doing this gives us $16.42B for feeding the BigMac+Top50 countries. From here it's fairly reasonable to do a small extrapolation to cover the rest of the world, giving us a final figure of $17.3B to feed the world Big Macs.
Now to estimate the cost of a small Coke at McDonald's in different countries. This is hard, as McDonald's usually does not publish prices except in countries with Internet ordering - and that often requires you to create an account. Anyway, it turns out that some people like to take photos of McDonald's menus and keep tables of menu prices, so some hunting around revealed the following:
- China (pop. 1.375B, local cost 7, USD 1.067)
- India (pop. 1.285B, local cost 57, USD 0.853)
- USA (pop. 322M, local cost 1.99, USD 1.99)
- Indonesia (pop. 258M, local cost 7500, USD 0.5377)
- Brazil (pop. 205M, local cost 4, USD 0.9938)
- Pakistan (pop. 192M, local cost 110, USD 1.048)
- Russia (pop. 146M, local cost 48, USD 0.6430)
- Japan (pop. 126M, local cost 100, USD 0.8428)
These top 8 McCoke countries account for 53.5% of the world's population. Buying everyone a small Coke in these countries would cost $3.95B. Scaling that up linearly to cover the rest of the world would bring you to $7.38B. But this is also an overestimate, as poorer countries have cheaper Coke.
For a slightly better estimate, for the 8 countries listed above, the small Coke price varies between 25% and 45% of the price of the Big Mac. The population-weighted Small Coke-BigMac ratio is 39.38%. This gives us a lower estimate of $6.82B when taking our earlier Big Mac estimate into account.