
The Big Mac index: Value meal - mblakele
http://www.economist.com/daily/chartgallery/displaystory.cfm?story_id=14065333&fsrc=rss
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shivam14
For those interested in a more detailed view of PPP, see the world bank table
(2005) below. It includes a breakdown by expenditures such as food, health,
transportation, etc. Compare with the actual US$ exchange rate to get the PPP
ratio.

[http://siteresources.worldbank.org/ICPINT/Resources/icp-
fina...](http://siteresources.worldbank.org/ICPINT/Resources/icp-final-
tables.pdf)

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benmathes
The article itself says it's just a "humorous" look at PPP.

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scottdw2
The idea overlooks a lot.

For example, the demand for big macs may be different in different countries,
which would lead to price discrepancies. The same thing goes for supply (# of
restaurants, etc).

Also, the branding of a Big Mac is different in different countries. A
McDonald's in Paris or Brussels is generally more "upscale" than a McDonald's
in Chicago. That difference in branding can also impact price.

So, other than for the purposes of amusement, or understanding "Big Mac"
valuations, the "Big Mac Index" is not really a valid comparison metric.

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rudyfink
In 2003 the St. Louis Federal reserve did an analysis of the Big Mac Index
that found it to be pretty solid for PPP.

[http://research.stlouisfed.org/publications/review/03/11/pak...](http://research.stlouisfed.org/publications/review/03/11/pakko.pdf)
(PDF)

