The Big Mac Standard: A Statistical Illustration

Hiroshi Fujiki, 裕 藤木, ヒロシ フジキ, Yukinobu Kitamura (), 行伸 北村 and ユキノブ キタムラ

No a446, Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

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.

Keywords: Big Mac Index; Purchasing Power Parity; Panel Data (search for similar items in EconPapers)
JEL-codes: C23 F31 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2003-11
New Economics Papers: this item is included in nep-ifn and nep-mfd
Note: Bibliography: p. 11-12, First Draft: March, 1997; Second Draft: September, 2002; Revised: October, 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: The Big Mac Standard: A statistical Illustration (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hituec:a446

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