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http://ssrn.com/abstract=1945090
 
 

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Are Chinese Individuals Prone to Money Illusion?


Heleen Mees


Independent

Philip Hans Franses


Erasmus University Rotterdam (EUR) - Department of Econometrics

March 25, 2014

Tinbergen Institute Discussion Paper No. 11-149/4

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.

Number of Pages in PDF File: 54

Keywords: Money illusion, Experimental economics, Financial behavior, Psychology of money

JEL Classification: C91

working papers series


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Date posted: October 17, 2011 ; Last revised: March 25, 2014

Suggested Citation

Mees, Heleen and Franses, Philip Hans, Are Chinese Individuals Prone to Money Illusion? (March 25, 2014). Tinbergen Institute Discussion Paper No. 11-149/4. Available at SSRN: http://ssrn.com/abstract=1945090 or http://dx.doi.org/10.2139/ssrn.1945090

Contact Information

Heleen Mees (Contact Author)
Independent ( email )
No Address Available
Philip Hans Franses
Erasmus University Rotterdam (EUR) - Department of Econometrics ( email )
P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1278 (Phone)
+31 10 408 9162 (Fax)
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