Leica Q2 Monochrom and the Big Mac Index — a tale of three cities

Economists use that oft-vilified American fast-food export, the Big Mac, to determine purchasing power parity (PPP) between countries. That’s all well and good, but you can’t take a photograph with a Big Mac. How should the world of photography compare photographic purchasing power parity (PPPP) across the globe? Enter the Leica Q2 Monochrom.

The Big Mac Index

In spite of its dubious nutritional value, the ubiquity of the Big Mac has led to its adoption as a staple of economic analysis. For those unfamiliar with its use as a financial metric, let’s hear from an expert on the subject:

The Big Mac Index is a measure of purchasing power parity (PPP) between countries, based on the idea that the prices of similar goods should be similar across countries when measured in a common currency. The Big Mac Index uses the price of a Big Mac burger in different countries as a measure of the relative purchasing power of a currency. The index is useful to economists because it provides a simple, easily-understood way to compare the purchasing power of different currencies, and can be used as a rough measure of a country’s level of inflation. Additionally, the Big Mac Index can be used to compare the relative value of currencies, and to help identify possible over- or under-valuation of a currency.

The expert providing that description was none other than ChatGPT, a publicly accessible artificial intelligence (AI) system. It is based upon the Large Language Model, GPT-3, which I mentioned briefly in a previous article discussing generative AI. I threatened to use it when writing a future article; well, here it is in action.

Despite any misgivings you might have about the role of AI in today’s society, perhaps you can agree that a machine able to conjure up this definition of a semi-obscure economics tool (albeit slightly repetitive and in need of gentle editing) is remarkable.

And slightly scary.

The Leica Q2 Monochrom: it gets my vote

Moving on from mouth-watering burgers and machine-learning bards, I would like to introduce my alternative PPP framework based on the Leica Q2 Monochrom. First, a word from an expert on the attraction of a camera dedicated exclusively to black and white photography:

One advantage of a camera with a dedicated black and white sensor is that it can capture more detailed and nuanced black and white images, since the sensor is designed specifically for this purpose. Black and white sensors often have higher resolution and a wider dynamic range than colour sensors, which can result in better overall image quality. Additionally, a dedicated black and white sensor can produce images with greater tonal range and contrast, giving photographers more control over the final look of their images. Another advantage is that using a black and white sensor can simplify the photography process, since the photographer does not have to worry about colour balance and other colour-related issues. This can allow the photographer to focus more on composition, lighting, and other factors that are important for creating compelling black and white images.

Guess what? That explanation of the benefits of dedicated sensors for black-and-white photography was also written by ChatGPT in response to a question I posed.

Are you scared yet?

Back to my proposed alternative PPP measure; let’s think of it as the Big Macfilos Index. You might consider this camera too niche an item to be considered a purchasing power parity benchmark, given its cost and inability to take colour photographs; wouldn’t a more common-or-garden-variety device be a better choice?

My answer? As someone recently in the market for a Leica Q2 Monochrom, I decided a comparison of its cost in a smattering of countries would prove more enlightening than the global variation in the cost of a McDonald’s menu item. Besides, this is my custom PPP index, so I get to choose which camera we use…

For those of you wondering why someone who owns and loves the Leica Q2 would consider purchasing a Leica Q2 Monochrom, it was to be a retirement gift after 40 years of cerebral graft down the sodium chloride mine: a beautiful object and a springboard to full immersion at the deep-end of black and white digital photography.

Sales tax: a tale of three cities

I purchased my Leica Q2 several years ago at the Leica Store in San Francisco, where I lived at that time. I now live in San Diego, where we have no Leica Store. The San Francisco store was naturally the first place I asked about the Monochrom model.

Readers outside the United States might not be aware that goods here are advertised at retail cost, not including state and local taxes. Those sales taxes vary considerably depending on where the item is purchased. People living in Oregon, Montana, New Hampshire, or Delaware pay 0%. In California, they pay 7.25% plus sundry county, city, and local taxes. If you purchase an item in San Francisco, by the time you include these local taxes, the overall rate is 7.75%.

The situation is quite different in the UK and Europe, where goods are advertised inclusive of value-added tax (VAT) at 20% (in the case of the UK; the rate varies in other European countries). Purchasers not resident in the UK avoid this local sales tax and can buy goods net of VAT. Conveniently, Leica dealers in London (Leica Store, Mayfair or Red Dot Cameras) indicate prices both including and excluding VAT.

The same is true in Germany, where the Leica Store, Berlin displays prices inclusive of 19% VAT. The calculated VAT figure is displayed for information at check-out.

Pointing out the obvious, San Francisco purchases are made in US dollars (USD, $), London purchases in British pound sterling (GBP, £), and Berlin purchases in Euros (EUR, €).

The Leica Q2 Monochrom Index

The mighty greenback has surged in value compared to most of the world’s currencies during 2022. Driven by a ‘flight-to-safety’ triggered by the war in Ukraine and large interest rate hikes by a Federal Reserve struggling to rein in inflation, currency traders have piled into the US dollar. Contrast that with the fortunes of the pound. The strength of the US dollar and financial turmoil in the UK drove the currency temporarily to record lows in 2022.

Over the last twelve months, the value of sterling has slid from a high of 1.368 dollars to the pound to a low of 1.038 in September. As of writing, it is trading at 1.23.

The strength of the US dollar has also pummelled the euro. It briefly slipped below parity (0.954) at the time the pound hit its record low. It now stands at 1.051.

The key question is what this means for our (my) PPP benchmark, the Leica Q2 Monochrom.

Leica Q2 Monochrome: the numbers in black and white

The purchase price of the Leica Q2 Monochrom goes as follows:

• Leica Store San Francisco (free shipping): $6675
• Leica Store London (excluding VAT, including shipping at £118): £4313
• Leica Store Berlin (excluding VAT, including shipping at €199): €4988

Shipments from London or Berlin also incur import duties of $45

Harmonising to USD at today’s exchange rate, the costs are:

• $6675 in San Francisco
• $5307 in London
• $5288 in Berlin

Harmonising to USD at the record low exchange rates in September, the costs were:

• $6675 in San Francisco
• $4508 in London
• $4808 in Berlin

The greater purchasing power of the US economy, as demonstrated by its rating on the Leica Q2 Monochrom PPP Index, would enable US consumers to purchase this camera at savings of around $1375 (20%) in London or Berlin, provided they were comfortable with a long-distance transaction. Back in September, US consumers could have achieved a discount of $2167 (32%) if they had procured the camera from London.

That’s some serious moolah.

Leica Q2 Monochrom Index versus the Big Mac Index

I am resigned to the fact that my preferred purchasing power parity index is unlikely to catch on beyond a handful modest community of rabid seasoned Leica enthusiasts. However, it enabled me to save a tidy sum when I made my purchase of a Leica Q2 Monochrom from Red Dot Cameras in London at the beginning of September, at an exchange rate of $1.16 to the pound.

The photographs in this article were taken with that camera, which is superb. It has been described as the ultimate stealth camera: all black, devoid of the Leica logo and colour markings other than grey or white. It is indeed beautiful. I am still exploring its capabilities and how to make the best use of colour filters; I will report on my progress in a future article.

Just as I had hoped, I am undergoing and enjoying a full-immersion baptism in black and white photography, courtesy of a camera manufactured in Germany, purchased in the UK, and in action in the US.

When was the last time you ate a Big Mac? Have you ever bought photography gear from another country? Do you have any direct experience with the Leica Q2 Monochrom? Have you tried out ChatGPT yet? Are you worried about the rapid progress being made in the field of artificial intelligence? Let me know your thoughts in the comments below!

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A cup of coffee works wonders in supporting Macfilos

Did you know that Macfilos is run by a dedicated team of volunteers? We rely on donations to help pay our running costs. And even the cost of a cup of coffee will do wonders for our energy levels.

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