Every Christmas our family heads to Belfast to see the in-laws and eat gluttonously, drink copiously, argue endlessly and fill the boot dementedly before we head down South again. The difference in prices between the Republic and Northern Ireland is remarkable, particularly at Christmas when everyone is buying more of everything.

Choosing to shop in the North makes you richer.

Brexit will not change this. In fact, Brexit may make the price differences yet more clear-cut. If sterling were to weaken against the euro next year because of a nasty shock in the negotiations, a political change in London or simply because European rates move up quicker than expected, Southerners would be mad not to think of the North.

Commercially, we should regard Northern Ireland as a giant discount store. It is a “constitutional Lidl” just up the road.

But before focusing on the bargains that are available up North, it’s worth considering just how expensive Ireland is relative to countries around the world.

In almost all cases, the price of a pint of Guinness gets cheaper when it leaves Ireland. In some cases the difference is enormous.

To compare prices between Ireland and the rest of Europe, I’m going to construct an Irish version of the famous Big Mac Index. The Pint of Guinness Index is a boozy variation of the Big Mac Index. It compares prices of Guinness in Irish pubs all over the world from Tokyo to Bucharest, Lisbon to Lima.

In a world dominated by financial markets where exchange rates can move up and down for no apparent reason, the Big Mac Index was conceived by the Economist magazine to try to assess whether exchange rates between countries were at their “correct” level.

The economic theory behind this is called purchasing-power parity. This means that over the long term the exchange rate between two countries should move toward equalising the price of identical goods in two countries.

For the Economist, the Big Mac was a perfect identical product sold all over the world at McDonald’s franchises – a proxy for the real prices in each country.

So if the price of a Big Mac in America was $6 and was $3 in France, the Big Mac Index would imply that the euro was 50 per cent undervalued against the dollar. Ultimately, therefore, in the long term, the euro should rise against the dollar to eliminate this real underlying price difference.

Now let’s put Ireland into the frame.

If the Big Mac is America’s most conspicuous cultural export, bringing a version of America to the farthest parts of the globe, the ubiquitous Irish pub must be our equivalent.

It projects an ersatz Irishness to the most remote places. Some people might get sniffy about the replica, made-to-order Irish pubs, but it is the product Ireland exports everywhere.

According to the Guinness Index, the euro-sterling exchange rate is €1 = £0.62. Consequently, there is a gap of 30 per cent between the market exchange rate and the Guinness exchange rate. Photograph: Niall Carson/PA Wire

Therefore, for an Irish view of the world of economics, the same logic should apply for pints of Guinness as for Big Macs. If the pint of Guinness is way out of whack between two countries with differing exchange rates, then there must be something wrong.

What happens to the price of a pint of Guinness, brewed in Dublin when it leaves Dublin? Remember, economic theory states that because of transport costs, the price of goods should increase the farther away from the home country it travels.

But in almost all cases, the price of a pint of Guinness gets cheaper when it leaves Ireland. In some cases the difference is enormous. In Spain and Greece Guinness is 34 per cent cheaper than it is here. In Germany a pint of stout is 15 per cent cheaper and in Austria 25 per cent cheaper.

That’s only within the EU. Compare prices between Ireland and Singapore, Peru, Japan and Russia, and you can see where Ireland stands on the global league of expensiveness or cheapness. It’s not a pretty sight.

However, all these places are too far away to avail of the arbitrage between the prices. We can’t go shopping in Peru. But we can go up North.

Two economic zones Taking the political rhetoric about the “all-island economy” at face value, we can treat the island of Ireland as two economic zones within the one economy. We have the euro zone here and the sterling zone up North.

If we apply the Pint of Guinness index to the two exchange rates operating on the island, we can see that the sterling zone in this island economy is hugely undervalued vis a vis the euro zone. This is an opportunity for the Republic.

The average price of a pint in Dublin is €5.50; up the road, in central Belfast, the same pint will cost you £3.40, or €3.84. Therefore, the implied exchange rate from the Guinness Index is €1 = £0.62. Consequently, there is a gap of 30 per cent between the financial market exchange rate and the Guinness exchange rate.

This means that in Northern Ireland sterling is massively undervalued against the Euro.

Over time, the theory says, sterling would rise against the euro if its path were determined only by economic conditions in Ireland.

But the euro v sterling exchange rate is not determined by the events in Ireland. It is affected by world events. Therefore sterling won’t rise against the euro materially.

As a result there is a massive opportunity between the two zones of the all-island economy.

At these prices, it is an act of economic self-harm not to shop in the North. If you could do all your shopping in the North you could raise your disposable income by 30 per cent.

The benefits to the whole country of using the North as a “constitutional Lidl” – a bargain basement a few miles up the road – would be huge. Retailers in the Republic would almost certainly say that deserting the expensive South for the cheap North would destroy retail in the South. Granted, there would be some casualties, but more likely retail in the Republic would simply evolve.

Irish retail has never been destroyed by a 30 per cent increase in the disposable income of the Irish consumer.

This is the sober conclusion from the Pint of Guinness Index.