IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v16y2009i1p19-24.html
   My bibliography  Save this article

Development of Finns’ price knowledge after the changeover to the euro

Author

Listed:
  • Raijas, Anu
  • Aalto-Setälä, Ville

Abstract

This longitudinal study examines the 2002 changeover to the euro in Finland in order to find out how long it takes consumers to learn grocery prices in the new currency. We are especially interested in the influence of age on the process. We used price estimate data and market price data, with six data-collection points over 5 years, the first one just before the changeover and the last one 5 years after it. As expected, consumer price knowledge was clearly weaker immediately after the changeover than during the era of national currency. However, it has not improved significantly in 5 years. The probable reasons for the decreased price knowledge are the diminution of nominal values brought by the changeover (1 euro equals approximately 6 Finnish marks) and general indifference to prices, especially low ones, brought by the increasing standard of living.

Suggested Citation

  • Raijas, Anu & Aalto-Setälä, Ville, 2009. "Development of Finns’ price knowledge after the changeover to the euro," Journal of Retailing and Consumer Services, Elsevier, vol. 16(1), pages 19-24.
    • Handle: RePEc:eee:joreco:v:16:y:2009:i:1:p:19-24
    DOI: 10.1016/j.jretconser.2008.07.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969698908000325
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretconser.2008.07.001?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.

    References listed on IDEAS

    as
    1. Raghubir, Priya & Srivastava, Joydeep, 2002. "Effect of Face Value on Product Valuation in Foreign Currencies," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 29(3), pages 335-347, December.
    2. repec:dau:papers:123456789/3583 is not listed on IDEAS
    3. Rob Ranyard, 2007. "Euro Stories: The Irish Experience of Currency Change," Journal of Consumer Policy, Springer, vol. 30(4), pages 313-322, December.
    4. J. Marques, 2007. "The Euro Changeover and Numerical Intuition for Prices in the Old and New Currencies," Journal of Consumer Policy, Springer, vol. 30(4), pages 393-403, December.
    5. Ernst Fehr & Jean-Robert Tyran, 2001. "Does Money Illusion Matter?," American Economic Review, American Economic Association, vol. 91(5), pages 1239-1262, December.
    6. Winer, Russell S, 1986. "A Reference Price Model of Brand Choice for Frequently Purchased Products," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 13(2), pages 250-256, September.
    7. Gamble, Amelie, 2006. "Euro illusion or the reverse? Effects of currency and income on evaluations of prices of consumer products," Journal of Economic Psychology, Elsevier, vol. 27(4), pages 531-542, August.
    8. Marc Vanhuele & X. Drèze, 2002. "Measuring the Price Knowledge Shoppers Bring to the Store," Post-Print hal-00457563, HAL.
    9. Eva Hofmann & Erich Kirchler & Bernadette Kamleitner, 2007. "Consumer Adaptation Strategies: From Austrian Shilling to the Euro," Journal of Consumer Policy, Springer, vol. 30(4), pages 367-381, December.
    10. Cannon, Edmund & Cipriani, Giam Pietro, 2006. "Euro-Illusion: A Natural Experiment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(5), pages 1391-1403, August.
    11. Marc Vanhuele & Gilles Laurent & Xavier Drze, 2006. "Consumers' Immediate Memory for Prices," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 33(2), pages 163-172, July.
    12. Pierre Desmet, 2002. "A study of the Potential Effects of the Conversion to Euro," Post-Print halshs-00143391, HAL.
    13. Fabio Missier & Nicolao Bonini & Rob Ranyard, 2007. "The Euro Illusion in Consumers’ Price Estimation: An Italian–Irish Comparison in the Third Year of the Euro," Journal of Consumer Policy, Springer, vol. 30(4), pages 337-354, December.
    14. Marc Vanhuele & Gilles Laurent & X. Drèze, 2006. "Consumers' Immediate Memory for Prices," Post-Print halshs-00119558, HAL.
    15. Patrick Lemaire, 2007. "The Impact of the Euro Changeover on Between-Currency Conversions," Journal of Consumer Policy, Springer, vol. 30(4), pages 383-391, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amelie Gamble, 2007. "The “Euro Illusion”: Illusion or Fact?," Journal of Consumer Policy, Springer, vol. 30(4), pages 323-336, December.
    2. Tommy Gärling & John Thøgersen, 2007. "Effects of the Euro Changeover on Consumer Behaviour: Introduction to the Special Issue," Journal of Consumer Policy, Springer, vol. 30(4), pages 303-311, December.
    3. repec:agr:journl:v:1(618):y:2019:i:1(618):p:5-22 is not listed on IDEAS
    4. Rob Ranyard, 2007. "Euro Stories: The Irish Experience of Currency Change," Journal of Consumer Policy, Springer, vol. 30(4), pages 313-322, December.
    5. Jensen, Birger Boutrup & Grunert, Klaus G., 2014. "Price Knowledge During Grocery Shopping: What We Learn and What We Forget," Journal of Retailing, Elsevier, vol. 90(3), pages 332-346.
    6. Lillian L. Cheng & Kent B. Monroe, 2013. "An appraisal of behavioral price research (part 1): price as a physical stimulus," AMS Review, Springer;Academy of Marketing Science, vol. 3(3), pages 103-129, September.
    7. Vivian Dzokoto & Edwin Mensah & Maxwell Twum-Asante & Annabella Opare-Henaku, 2010. "Deceiving Our Minds: A Qualitative Exploration of the Money Illusion in Post-redenomination Ghana," Journal of Consumer Policy, Springer, vol. 33(4), pages 339-353, December.
    8. Mariko SHIMIZU, 2019. "Why do high ability people also suffer from money illusion? Experimental evidence of behavioral contradiction," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(618), S), pages 5-22, Spring.
    9. Linzmajer, Marc & Hubert, Mirja & Hubert, Marco, 2021. "It’s about the process, not the result: An fMRI approach to explore the encoding of explicit and implicit price information," Journal of Economic Psychology, Elsevier, vol. 86(C).
    10. Antonio J. Morales & Enrique Fatas, 2021. "Price competition and nominal illusion: experimental evidence and a behavioural model," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 12(4), pages 607-632, December.
    11. Lunn, Pete & Duffy, David, 2010. "The Euro Through the Looking-Glass: Perceived Inflation Following the 2002 Currency Changeover," Papers WP338, Economic and Social Research Institute (ESRI).
    12. Nicole Koschate-Fischer & Katharina Wüllner, 2017. "New developments in behavioral pricing research," Journal of Business Economics, Springer, vol. 87(6), pages 809-875, August.
    13. Eva Hofmann & Erich Kirchler & Bernadette Kamleitner, 2007. "Consumer Adaptation Strategies: From Austrian Shilling to the Euro," Journal of Consumer Policy, Springer, vol. 30(4), pages 367-381, December.
    14. Grundmann, Susanna & Giamattei, Marcus & Lambsdorff, Johann Graf, 2019. "Intentions rather than money illusion – Why nominal changes induce real effects," European Economic Review, Elsevier, vol. 119(C), pages 166-178.
    15. Fabio Missier & Nicolao Bonini & Rob Ranyard, 2007. "The Euro Illusion in Consumers’ Price Estimation: An Italian–Irish Comparison in the Third Year of the Euro," Journal of Consumer Policy, Springer, vol. 30(4), pages 337-354, December.
    16. Raghubir, Priya & Morwitz, Vicki G. & Santana, Shelle, 2012. "Europoly Money: How Do Tourists Convert Foreign Currencies to Make Spending Decisions?," Journal of Retailing, Elsevier, vol. 88(1), pages 7-19.
    17. DAMAY, Coralie, 2007. "Mémorisation des prix par les enfants : Que nous apprennent leurs erreurs de rappel ?," HEC Research Papers Series 871, HEC Paris.
    18. Charles N. Noussair & Gregers Richter & Jean-Robert Tyran, 2008. "Money Illusion and Nominal Inertia in Experimental Asset Markets," Discussion Papers 08-29, University of Copenhagen. Department of Economics.
    19. Feng, Shan & Suri, Rajneesh & Chao, Mike Chen-Ho & Koc, Umit, 2017. "Presenting comparative price promotions vertically or horizontally: Does it matter?," Journal of Business Research, Elsevier, vol. 76(C), pages 209-218.
    20. Suleyman Basak & Hongjun Yan, 2010. "Equilibrium Asset Prices and Investor Behaviour in the Presence of Money Illusion," Review of Economic Studies, Oxford University Press, vol. 77(3), pages 914-936.
    21. Fabrizio Adriani & Giancarlo Marini & Pasquale Scaramozzino, 2009. "The Inflationary Consequences of a Currency Changeover on the Catering Sector: Evidence from the Michelin Red Guide," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 111-133, February.

    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:joreco:v:16:y:2009:i:1:p:19-24. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: https://www.journals.elsevier.com/journal-of-retailing-and-consumer-services .

    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.