The Big Mac Index is a survey created by The Economist magazine in 1986 to measure

purchasing power parity (PPP) between nations, using the price of a McDonald's Big
Mac as the benchmark[1][2]. It is based on the theory of purchasing-power parity, which
suggests that exchange rates should move towards equality in the prices of an identical
basket of goods over time[2]. Here's what the search results reveal about the accuracy
of the Big Mac Index:

- Economists generally consider the Big Mac Index to be a fairly accurate real-world
indicator of local economic purchasing power[1].

- A study found that the Big Mac Index is surprisingly accurate in tracking exchange
rates over the long-term[3].

- The index has been used as a global standard for price comparison and has been used
to track local purchasing power internationally[1].

- However, the index is not without its critics, and some argue that it lacks diversity as it
is based on the price of a single item[6].

Overall, while the Big Mac Index is not a perfect measure, it is considered to be a useful
tool for comparing purchasing power parity between countries and can provide insights
into currency valuation and inflation[5][6].

Citations:

[1] https://www.investopedia.com/ask/answers/09/big-mac-index.asp

[2] https://www.economist.com/big-mac-index

[3] https://link.springer.com/chapter/10.1057/9780230512412_3

[4] https://nomadcapitalist.com/finance/big-mac-index/

[5] https://www.wallstreetmojo.com/big-mac-index/

[6] https://www.visualcapitalist.com/cp/big-mac-index-purchasing-power-parity-burger-
inflation/