The Big Mac Index can be used by investors to determine if a currency is overvalued or undervalued relative to others before making trading in the foreign exchange market based on that data. Investors can also measure changes in values over time to determine rates of inflation and compare that to official records. The index is also especially useful in countries where reliable indices aren't available, such as those that manipulate government statistics or those that don't publish official data. In these countries, investors may have trouble comparing consumer inflation to the exchange rate.
One flaw with the index is that while the way the manufacture and distribution of the Big Mac is the same in every country, the cost of the labour to staff the stores, the cost of the storefront, additional costs within the franchise license to operate the McDonald's restaurant and costs to import/acquire the inputs might be different across countries. Prices of Big Macs can also vary greatly between different areas within a country. For example, a Big Mac sold in a major city might be less expensive than one sold at a McDonald's located in a rural area. This may sway the price of the Big Mac and throw off the ratio. Despite this, the Big Mac Index is a functional starting point in determining currency discrepancies.