IDEAS home Printed from https://ideas.repec.org/a/eee/joepsy/v83y2021ics0167487020301069.html
   My bibliography  Save this article

Revisiting “money illusion”: Replication and extension of Shafir, Diamond, and Tversky (1997)

Author

Listed:
  • Ziano, Ignazio
  • Li, Jie
  • Tsun, Shue Man
  • Lei, Hoi Ching
  • Kamath, Anvita Anil
  • Cheng, Bo Ley
  • Feldman, Gilad

Abstract

Shafir et al. (1997) described money illusion as people’s inclination to think of money without taking inflation sufficiently into account, i.e., in nominal terms rather than in real terms. We successfully replicated Problems 1 to 4 of Shafir, Diamond, and Tversky’s study (1997) on money illusion (MTurk; N = 604). We found effect sizes in line with the original ones for assessments of income (Problem 1; original: Cramer’s V = 0.26, 95% CI [0.17, 0.37]; replication: V = 0.28 [0.21, 0.36]), transactions (Problem 2; original: 48% [42%, 52%]; replication: 70% [66%, 73%]), sales and consumption (Problem 3; original buy: 38% [33%, 43%]; replication buy: 47% [43%, 51%]; original sell: 43%% [38%, 48%]; replication sell: 43% [39%, 47%]), and contracts (Problem 4; original: V = 0.25 [0.13, 0.42]; replication: V = 0.17 [0.10, 0.25]). With an added extension, we found no support for the notion that knowing about or correctly estimating the inflation rate affected money illusion. We discuss theoretical implications for the study of money illusion and the psychological meaning of inflation, as well as for the understanding of the antecedents of money illusion. All data, code, and materials are available on https://osf.io/rv9mw/.

Suggested Citation

  • Ziano, Ignazio & Li, Jie & Tsun, Shue Man & Lei, Hoi Ching & Kamath, Anvita Anil & Cheng, Bo Ley & Feldman, Gilad, 2021. "Revisiting “money illusion”: Replication and extension of Shafir, Diamond, and Tversky (1997)," Journal of Economic Psychology, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:joepsy:v:83:y:2021:i:c:s0167487020301069
    DOI: 10.1016/j.joep.2020.102349
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167487020301069
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.joep.2020.102349?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Chavanne & Zak Danz & Jitu Dribssa & Rachel Powell & Matthew Sambor, 2022. "Context and the Perceived Fairness of Price Increases Coming out of COVID‐19," Social Science Quarterly, Southwestern Social Science Association, vol. 103(1), pages 55-68, January.
    2. El Halabi, Malak & Chan, Wing Yan Florence & Tunca, Burak & Ziano, Ignazio & Feldman, Gilad, 2022. "Replication: Unsuccessful replications and extensions of Temporal Value Asymmetry in monetary valuation and moral judgment," Journal of Economic Psychology, Elsevier, vol. 90(C).

    More about this item

    Keywords

    Money illusion; Nominal and real values; Nominal framing; Replication; Judgement and decision making;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joepsy:v:83:y:2021:i:c:s0167487020301069. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/joep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.