The Big Mac Index is a mediocre currency education toy, nothing more.
And they admit it:
> Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible.
The Big Mac Index is also not accurate as it pertains to the US. Big Mac prices vary considerably by location in the US (ranging from $3.x to $6.x). It'd be like trying to pretend there's a Big Mac price in the EU. The index claims $5.65 for the US. That's their poor attempt at a national guess, they didn't actually figure out prices for every location, and they appear to have picked a high price as their foundation. Cities in Florida, Texas, Illinois, Pennsylvania and Ohio are commonly in the $4.x price area for example.
This article finds the national average is closer to $4.82 (in my state it's well below that) -
And they admit it:
> Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible.
The Big Mac Index is also not accurate as it pertains to the US. Big Mac prices vary considerably by location in the US (ranging from $3.x to $6.x). It'd be like trying to pretend there's a Big Mac price in the EU. The index claims $5.65 for the US. That's their poor attempt at a national guess, they didn't actually figure out prices for every location, and they appear to have picked a high price as their foundation. Cities in Florida, Texas, Illinois, Pennsylvania and Ohio are commonly in the $4.x price area for example.
This article finds the national average is closer to $4.82 (in my state it's well below that) -
https://www.restaurantbusinessonline.com/financing/why-big-m...