Burgernomics Revisited: Regional Purchasing Power

Authors

FISCHER Jakub LIPOVSKÁ Hana

Year of publication 2015
Type Article in Proceedings
Conference Mathematical Methods in Economics 33rd international conference in Cheb
MU Faculty or unit

Faculty of Economics and Administration

Citation
Web http://mme2015.zcu.cz/conference-proceedings/
Field Economy
Keywords Big Mac Index; cluster analysis; inter-area price levels; Regional purchase power parity
Description The aim of this paper is to estimate inter-area price levels in the Czech Republic. For this purpose, we developed the Regional Big Mac Index as a variation of the standard Big Mac Index which was calculated by The Economist. A unique dataset was used of Big Mac sales and prices in 89 McDonald’s restaurants for June 2013. The analysis was performed by employing OLS model, cluster analysis and standard statistical methods. We found that Regional Big Mac Index is not suitable for estimating inter-area price levels in the Czech Republic, as it is only moderately correlated with the regional purchase power parity.
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