The Big Mac index: Value meal

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.<p><a href="http://siteresources.worldbank.org/ICPINT/Resources/icp-final-tables.pdf" rel="nofollow">http://siteresources.worldbank.org/ICPINT/Resources/icp-fina...</a>

The idea overlooks a lot.<p>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).<p>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.<p>So, other than for the purposes of amusement, or understanding "Big Mac" valuations, the "Big Mac Index" is not really a valid comparison metric.