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Testing Consumers' Asymmetric Perception Of Changes In Household Financial Situation


  • Mauro Mastrogiacomo


Using empirical analysis, this study shows that individuals perceive negative changes in their financial situation as larger relative to positive changes. Evidence of this asymmetry is provided using survey data on individual expectations, perceptions, income, and wealth. The study's results are in line with results in the psychological-economic literature but, contrary to that literature, are obtained by analyzing panel survey data, rather than experimental evidence. These results cast some doubts on the tendency of economists to treat symmetrically the relation between economic variables and income or wealth in their models. Copyright 2010 The Author. Journal compilation International Association for Research in Income and Wealth 2010.

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  • Mauro Mastrogiacomo, 2010. "Testing Consumers' Asymmetric Perception Of Changes In Household Financial Situation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(2), pages 327-350, June.
  • Handle: RePEc:bla:revinw:v:56:y:2010:i:2:p:327-350

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    References listed on IDEAS

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    Cited by:

    1. Merike Kukk & Dmitry Kulikov & Karsten Staehr, 2016. "Estimating Consumption Responses to Income Shocks of Different Persistence Using Self-Reported Income Measures," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(2), pages 311-333, June.

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