Big Mac Index

The Big Mac index was introduced in The Economist in September 1986 by Pam Woodall[2] as a semi-humorous illustration of PPP and has been published by that paper annually since then.

Although the Big Mac Index was not intended to be a legitimate tool for exchange rate evaluation, it is now globally recognised and featured in many academic textbooks and reports.

[4] The theory underpinning the Big Mac index stems from the concept of PPP, which states that the exchange rate between two currencies should equalize the prices charged for an identical basket of goods.

[6] In an effort to simplify this important economic concept, The Economist proposed that a single McDonald's Big Mac could be used instead of a basket of goods.

A McDonald's Big Mac was chosen because of the prevalence of the fast food chain worldwide, and because the sandwich remains largely the same across all countries.

[9] For example, using figures for July 2023:[3] While economists widely cite the Big Mac index as a reasonable real-world measurement of purchasing power parity,[21][22] the burger methodology has some limitations.

[26][27] Standard food ingredients are cheap in Russia, while restaurants suitable for business dinners with English speaking staff are expensive.

Critics of the presidency of Cristina Fernández de Kirchner in Argentina and many economists believe that the government has for years falsified consumer price data to understate the country's true inflation rate.

They no longer prominently advertised Big Macs for sale and the sandwich, both individually and as part of value meals, was being sold for an unusually low price compared to other items.

[33] Six fastest earned (July 2015) This statistic shows the average working time required to buy one Big Mac in selected cities around the world in 2015.

[34] Six slowest earned (July 2015) This statistic shows the average working time required to buy one Big Mac in selected cities around the world in 2015.