Realising the Euro - Price Perception in the New Context of the Euro
16 Pages Posted: 20 Nov 2012
Date Written: June 1, 2001
This paper studies the impact of the mental money conversion process on price perception in Austria (1 euro = 13.76 ATS) and France (1 euro = 6.56 francs). Money conversion has been implicated and investigated within the framework of 2 different reference price conceptions. In addition, the evolution of threshold prices from current currencies to the euro was examined. 450 subjects participated in the investigation. Participants were asked to name a number of products and services along with their current currency prices. Then they were asked to give euro prices for the same products. Overall, the results indicate that participants in both countries used a significantly higher exchange rate than the official one and therefore calculate generally lower euro prices. More specifically, the used exchange rates depended on certain price levels because of rounding effects toward odd-prices in euro. Furthermore, in both countries approximately one half of the elaborated price thresholds disappeared through the money conversion process.
Keywords: euro, price perception, reference price, threshold price
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