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Subjective well-being approach for testing money illusion: Evidence using data from Social Weather Stations

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  • Beja, Edsel Jr.

Abstract

This paper tests money illusion using measures for subjective well-being, nominal income, and price. It tests the hypothesis that there is no money illusion when proportional changes in both nominal income and price do not bring about a change in subjective well-being. The study uses food poverty data from Social Weather Stations as proxy measure for nominal income and food CPI inflation from the Philippine Statistics Authority as proxy measure for price. The findings suggest no money illusion in general. More specifically, the findings provide conclusive evidence of no money illusion for the food-poor but not for the food-nonpoor.

Suggested Citation

  • Beja, Edsel Jr., 2015. "Subjective well-being approach for testing money illusion: Evidence using data from Social Weather Stations," MPRA Paper 101082, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:101082
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    Cited by:

    1. Beja, Edsel Jr., 2019. "Consumer Expectations Survey and Quarterly Social Weather Survey: Evidence of Convergent Validity and Causality," MPRA Paper 101074, University Library of Munich, Germany.

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    More about this item

    Keywords

    Money illusion; subjective well-being; income; price; Philippines;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • D6 - Microeconomics - - Welfare Economics
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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