The Big Mac product name became the basis for The Economist’s informal currency comparison index.
The Big Mac Index was introduced by The Economist in 1986 as a simple way to discuss purchasing-power parity. Because the sandwich is sold in many countries, comparing its local price with its United States price can offer a rough illustration of whether currencies appear overvalued or undervalued.
The index is not an official exchange-rate measure. Prices differ because of taxes, rent, wages, supply chains, competition, and local demand. Even so, the standardized and recognizable Big Mac makes the comparison easy for a general audience to understand.
The index is sometimes confused with a McDonald’s sales ranking or a formal economic statistic. It is instead a lighthearted analytical tool built around a branded menu item. Its existence shows how strongly the Big Mac functions as a globally recognizable McDonald’s symbol.