Editing Big Mac Index (section)

== Limitations ==
While economists widely cite the Big Mac index as a reasonable real-world measurement of purchasing power parity,<ref>{{cite book | last1 = McConnell | first1 = Campbell | last2 = Brue  | first2 = Stanley | title = Microeconomics, 16th ed.|url = https://books.google.com/books?id=hObpeG6v1VsC  | page = 473  | publisher = [[McGraw Hill]]| year = 2004  | isbn = 978-0-07-287561-4  }}</ref>{{r|ec20110127}} the burger methodology has some limitations.
[[File:McDonaldsWorldLocations.svg|300px|thumb|right|Map of countries with at least one McDonald's restaurant, showing the lack of restaurants in Africa (2022)]]
The Big Mac Index is limited by geographical coverage, due to the presence of the [[McDonald's]] franchise. For example, in [[Africa]] McDonald's is only present in [[Morocco]], [[Egypt]], [[South Africa]] and [[Mauritius]] (there has been a similar index created solely for Africa called the "[[KFC Index]]": as the name suggests, instead of using a [[Big Mac]], this index uses [[KFC]]'s Original 15-piece bucket to compile its data).<ref name="SagaciSondos">{{cite web |last1=Faramawy |first1=Sondos |title=The KFC Index Report by Sagaci Research |url=https://www.sagaciresearch.com/kfcindex/ |website=sagacireserch.com |date=27 July 2016 |publisher=Sagaci Research |access-date=20 August 2019 |archive-date=10 July 2019 |archive-url=https://web.archive.org/web/20190710162454/https://www.sagaciresearch.com/kfcindex/ |url-status=live }}</ref>

In many countries, eating at international fast-food chain restaurants such as McDonald's is relatively expensive in comparison to eating at a local restaurant, and the demand for Big Macs is not as large in countries such as [[India]] as in the United States. Social status of eating at fast food restaurants such as McDonald's in a local market, what proportion of sales might be to expatriates, local taxes, levels of competition, and import duties on selected items may not be representative of the country's economy as a whole.

In addition, there is no theoretical reason why non-tradable goods and services such as property costs should be equal in different countries: a pound of American beef used in the Big Mac's patties is not the same price as a pound of beef in China. This is the theoretical reason PPPs differ from market exchange rates over time. The relative cost of high-[[profit margin|margin]] products, such as essential pharmaceutical products or cellular telephony, might compare local capacity and [[willingness to pay]] as much as relative currency values.

Nevertheless, McDonald's is also using different commercial strategies which can result in huge differences for a product. Overall, the price of a Big Mac will be a reflection of its local production and delivery cost, the cost of advertising (considerable in some areas), and most importantly what the local market will bear&nbsp;– quite different from country to country, and not all a reflection of relative currency values.

In some markets, a high-volume and low-margin approach makes most sense to maximize profit, while in others a higher margin will generate more profit. Thus the relative prices reflect more than currency values. For example, a hamburger costs only {{€|1}} in [[France]], and {{€|1.50}} in [[Belgium]], but overall, McDonald's restaurants in both countries cost roughly the same.<ref name="NationMaster">{{cite web |title=McDonalds meal: Countries Compared |url=https://www.nationmaster.com/country-info/stats/Cost-of-living/Restaurant-prices/McDonalds-meal |website=nationmaster.com |publisher=NationMaster |access-date=20 August 2019 |archive-date=20 August 2019 |archive-url=https://web.archive.org/web/20190820023803/https://www.nationmaster.com/country-info/stats/Cost-of-living/Restaurant-prices/McDonalds-meal |url-status=live }}</ref> Prices of Big Macs can also vary greatly between different areas within a country. For example, a Big Mac sold in [[New York City]] will be more expensive than one sold at a McDonald's located in a rural area.<ref name="BLSRural">{{cite web |last1=Hawk |first1=William |title=Expenditures of urban and rural households in 2011 |url=https://www.bls.gov/opub/btn/volume-2/expenditures-of-urban-and-rural-households-in-2011.htm |website=bls.gov |publisher=U.S. Bureau of Labor Statistics |access-date=20 August 2019 |archive-date=20 August 2019 |archive-url=https://web.archive.org/web/20190820023804/https://www.bls.gov/opub/btn/volume-2/expenditures-of-urban-and-rural-households-in-2011.htm |url-status=live }}</ref>

One other example is that Russia had one of the cheapest Big Macs at its time in 2019, despite the fact that Moscow was then the most expensive city in the world.<ref name="Moscow">{{cite web |title=Big Mac Index Counts Ruble as Most Undervalued Currency |url=https://www.themoscowtimes.com/2019/07/16/big-mac-index-counts-ruble-as-most-undervalued-currency-a66422 |website=themoscowtimes.com |date=16 July 2019 |publisher=Stichting 2 Oktober |access-date=20 August 2019 |archive-date=16 July 2019 |archive-url=https://web.archive.org/web/20190716132858/https://www.themoscowtimes.com/2019/07/16/big-mac-index-counts-ruble-as-most-undervalued-currency-a66422 |url-status=live }}</ref><ref name="AMA">{{cite web |title=Moscow Is Now the World's Most Expensive City |url=https://www.amanet.org/articles/moscow-is-now-the-world-s-most-expensive-city/ |website=amanet.org |publisher=American Management Association |access-date=20 August 2019 |archive-date=20 August 2019 |archive-url=https://web.archive.org/web/20190820023805/https://www.amanet.org/articles/moscow-is-now-the-world-s-most-expensive-city/ |url-status=live }}</ref> Standard food ingredients are cheap in Russia, while restaurants suitable for business dinners with English speaking staff are expensive.

=== Manipulation ===
Critics of the [[presidency of Cristina Fernández de Kirchner]] in [[Argentina]] and many economists believe that the government has for years falsified consumer price data to understate the country's true inflation rate.{{r|politi20111124}} ''The Economist'' stated in January 2011 that Big Mac index "does support claims that Argentina's government is [[cooking the books]]. The gap between its average annual rate of burger inflation (19%) and its official rate (10%) is far bigger than in any other country."<ref name="ec20110127">{{cite news | url=http://www.economist.com/node/18014576?story_id=18014576 | title=Lies, flame-grilled lies and statistics | newspaper=The Economist | date=27 January 2011 | access-date=10 June 2012 | archive-date=14 January 2018 | archive-url=https://web.archive.org/web/20180114184425/http://www.economist.com/node/18014576?story_id=18014576 | url-status=live }}</ref> That year the press began reporting on unusual behavior by the more than 200 Argentinean McDonald's restaurants. They no longer prominently advertised Big Macs for sale and the sandwich, both individually and as part of [[value meal]]s, was being sold for an unusually low price compared to other items. [[Guillermo Moreno]], Secretary of Commerce in the Kirchner government, reportedly forced McDonald's to sell the Big Mac at an artificially low price to manipulate the country's performance on the Big Mac index.{{r|sanguinetti20120608}}<ref name="politi20111124">{{cite news | url=http://latitude.blogs.nytimes.com/2011/11/24/argentinas-big-mac-attack/ | title=Argentina's Big Mac Attack | work=The New York Times | date=24 November 2011 | access-date=10 June 2012 | author=Politi, Daniel | archive-date=21 June 2012 | archive-url=https://web.archive.org/web/20120621081114/http://latitude.blogs.nytimes.com/2011/11/24/argentinas-big-mac-attack/ | url-status=live }}</ref> In June 2012, the price of the Big Mac value meal suddenly rose by 26%, closer to that of other meals, after ''The Economist'', ''The New York Times'', and other media reported on the unusual pricing. A Buenos Aires newspaper stated "Moreno loses the battle".<ref name="sanguinetti20120608">{{cite news | url=http://www.cronista.com/economiapolitica/Moreno-pierde-la-batalla-el-Big-Mac-sale-del-freezer-y-aumenta-26-su-precio-20120608-0012.html | title=Moreno pierde la batalla: el Big Mac sale del freezer y aumenta 26% su precio | language=es | work=El Cronista | date=8 June 2012 | access-date=15 June 2012 | author=Sanguinetti, Andrew | location=Buenos Aires, Argentina}}</ref>

=== Comparison issues ===
The Big Mac (and virtually all sandwiches) vary from country to country with differing nutritional values, weights and even nominal size differences.

Not all Big Mac burgers offered by the chain are exclusively beef. In India&nbsp;– which is a predominantly [[Hindu]] country&nbsp;– beef burgers are not available at any McDonald's outlets. The Chicken [[Big Mac#Variants|Maharaja Mac]] serves as a substitute for the Big Mac.

There is a lot of variance with the exclusively beef "Big Mac": the Australian version of the Big Mac has 22% fewer calories than the Canadian version, and is 8% lighter than the version sold in Mexico.<ref>{{cite news |title=Big Mac? Not really, as Australian version of burger downsized |newspaper=[[The Advertiser (Adelaide)]] |date=13 June 2009 |url=http://www.news.com.au/national/big-mac-not-really-as-australian-version-of-burger-downsized/story-e6frfkp9-1225734286785 |access-date=3 November 2016 |archive-date=29 December 2015 |archive-url=https://web.archive.org/web/20151229210243/http://www.news.com.au/national/big-mac-not-really-as-australian-version-of-burger-downsized/story-e6frfkp9-1225734286785 |url-status=live }}</ref>

On 1 November 2009, all three of the McDonald's in [[Iceland]] closed, primarily due to the chain's high cost of importing most of the chain's meat and vegetables, by McDonald's demands and standards, from the [[Eurozone]]. At the time, a Big Mac in Iceland cost 650 krona ($5.29), and the 20% price increase that would have been needed to stay in business would have increased that cost to 780 krona ($6.36).<ref>[https://www.cbsnews.com/news/iceland-says-bye-to-the-big-mac/ Iceland Says Bye to the Big Mac], CBS News, 26 October 2009</ref><ref>Archived at [https://ghostarchive.org/varchive/youtube/20211211/vAij2T2wXZ0 Ghostarchive]{{cbignore}} and the [https://web.archive.org/web/20131016212600/http://www.youtube.com/watch?v=vAij2T2wXZ0 Wayback Machine]{{cbignore}}: {{Cite web|url=https://www.youtube.com/watch?v=vAij2T2wXZ0|title=McDonalds leaves Iceland. Golden arch removed from Reykjavik restaurant. – YouTube|website=[[YouTube]] }}{{cbignore}}</ref> Fish and lamb are produced in Iceland, while beef is often imported (but also exported).