Our Approach
TheBigMacIndex.com provides the world's most up-to-date Big Mac Index — also known as burgernomics — by collecting actual prices from real restaurant menus, rather than relying on periodic surveys. Here's how it works.
Data Collection
We collect Big Mac prices from delivery platforms across multiple cities per country. For each city, we sample prices from several McDonald's locations to ensure accuracy. Prices are collected in the local currency and include the standard Big Mac (no meals, combos, or variants).
- Frequency: Prices are refreshed daily, giving you the most current data available.
- Coverage: Multiple cities per country to capture regional price variation.
- Filtering: We exclude meal deals, bundles, and promotional items — only the standalone Big Mac counts.
- Verification: Community submissions help validate and extend our automated data collection.
Price Calculation
For each country, we take the median price across all sampled cities. The median is more robust than the average because it isn't skewed by outlier prices in unusually expensive or cheap locations.
Prices are converted to US dollars using real-time exchange rates updated daily from financial data providers. This is a key difference from traditional indices that may use exchange rates that are weeks or months old.
Raw PPP Index
The raw purchasing-power parity index works in three steps:
- Step 1: Calculate the implied PPP rate = Local Big Mac Price / US Big Mac Price. This is the exchange rate that would equalize Big Mac prices between the two countries.
- Step 2: Compare the implied rate to the actual market exchange rate.
- Step 3: The valuation percentage = (Implied PPP / Market Rate - 1) × 100. A positive result means the local currency is overvalued against the dollar; negative means undervalued.
GDP-Adjusted Index
The raw index has a well-known limitation: you'd expect Big Macs to be cheaper in poorer countries simply because labour and input costs are lower. A cheap Big Mac in Thailand doesn't necessarily mean the Thai baht is undervalued — it may just reflect lower production costs.
To address this, we run a log-linear regression of Big Mac USD prices against GDP per capita (PPP-adjusted, from the World Bank). This tells us what a Big Mac "should" cost given a country's income level. The GDP-adjusted index then measures how far the actual price deviates from this predicted price.
The GDP-adjusted index is generally considered a better gauge of currency misalignment for comparing countries at different development levels.
How We Differ from The Economist
The Economist invented the Big Mac Index in 1986, and we gratefully build on their foundational work. However, our approach differs in several important ways:
- Update frequency: We update prices daily; The Economist publishes 1–2 times per year.
- Data source: We use actual menu prices from delivery platforms; The Economist relies on periodic surveys.
- City-level data: We provide price breakdowns for individual cities, not just country averages.
- Community verification: Verified users can submit and validate prices, creating a self-correcting dataset.
- Exchange rates: We use daily spot rates; traditional indices may use rates from the publication date.
Limitations
The Big Mac Index — including our real-time version — was never intended as a precise gauge of currency misalignment. It is a useful directional indicator and educational tool, not a trading signal. Key limitations include:
- Big Mac prices are influenced by local factors like taxes, rent, competition, and supply chain costs that have nothing to do with currency valuation.
- McDonald's may set prices strategically rather than purely based on costs.
- Delivery platform prices may differ from in-store prices.
- Not every country has McDonald's (though Big Mac availability is remarkably wide).
Despite these limitations, the Big Mac Index remains one of the most intuitive and widely-cited tools for understanding exchange rate dynamics. Our real-time approach simply makes it more current and granular than ever before.
Ready to try it? Use our Big Mac Index Calculator to compare purchasing power between any two countries using live data.
