Big Mac Index

The Economist's lighthearted PPP test comparing Big Mac prices across countries to gauge currency valuation.

Specifications & Metrics

Introduced in September 1986 by Pam Woodall as a semi-humorous guide to purchasing power parity.
A currency is called overvalued when a Big Mac costs more locally than in the United States.
Because burgers are not tradable across borders, the index captures the Balassa-Samuelson effect rather than pure arbitrage.