Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2011-10-14
Revision-Date: 2014-03-25
Number: 11-149/4
Author-Name: Heleen Mees
Author-Workplace-Name: New York University, Wagner Graduate School of Public Service, United States
Author-Name: Philip Hans Franses
Author-Workplace-Name: Erasmus University Rotterdam, the Netherlands
Title: Are Chinese Individuals prone to Money Illusion?
Abstract: We replicate the landmark study of Shafir, Diamond and Tversky (1997) to examine whether individuals in China are prone to money illusion. We find that money illusion is prevalent in China as well. Respondents in the Chinese sample are often somewhat more likely to base decisions on the real monetary value of economic transactions compared to respondents in the U.S. sample. If asked explicitly to evaluate a transaction in terms of happiness or satisfaction, instead of economic terms, money illusion among respondents in the Chinese sample is comparable to money illusion among respondents in the U.S. sample.
Classification-JEL: C91
Keywords: Money illusion, Experimental economics, Financial behavior, Psychology of money
File-Url: https://papers.tinbergen.nl/11149.pdf
File-Format: application/pdf
File-Size: 295001 bytes
Handle: RePEc:tin:wpaper:20110149