Nontraded inputs account for the lion's share of a Big Mac price (Ong 1997, Parsley and Wei 2003). Major departures from Big Mac PPP may then be explained by the Balassa−Samuelson income differences effect, as shown e.g. by Click (1996). But it has been argued that Click's result is not robust to changing estimation methods, sample of countries, and time period (Fujiki and Kitamura 2003). Here ...
