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The Big Mac Standard: A statistical Illustration

Yukinobu Kitamura () and Hiroshi Fujiki

Economics Bulletin, 2004, vol. 6, issue 13, 1-18

Abstract: We demonstrate a statistical procedure for selecting the most suitable empirical model to test an economic theory, using the example of the test for purchasing power parity based on the Big Mac Index. Our results show that supporting evidence for purchasing power parity, conditional on the Balassa-Samuelson effect, depends crucially on the selection of models, sample periods and economies used for estimations.

JEL-codes: C2 F3 (search for similar items in EconPapers)
Date: 2004-09-02
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Citations: View citations in EconPapers (1)

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