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Charity Donations and the Euro Introduction: Some Quasi-Experimental Evidence on Money Illusion


  • Kooreman, Peter

    () (Tilburg University)

  • Faber, Riemer

    () (CPB Netherlands Bureau for Economic Policy Analysis)

  • Hofmans, Heleen

    (University of Groningen)


We compare the revenues of a house-to-house collection for a charity before and after the introduction of the euro in a ceteris paribus setting. We find strong evidence of money illusion, supplementing earlier econometric, experimental, and survey evidence on its existence.

Suggested Citation

  • Kooreman, Peter & Faber, Riemer & Hofmans, Heleen, 2004. "Charity Donations and the Euro Introduction: Some Quasi-Experimental Evidence on Money Illusion," IZA Discussion Papers 1318, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1318

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    References listed on IDEAS

    1. Eldar Shafir & Peter Diamond & Amos Tversky, 1997. "Money Illusion," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 341-374.
    2. Ernst Fehr & Jean-Robert Tyran, 2001. "Does Money Illusion Matter?," American Economic Review, American Economic Association, vol. 91(5), pages 1239-1262, December.
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    Cited by:

    1. Blumkin, Tomer & Ruffle, Bradley J. & Ganun, Yosef, 2012. "Are income and consumption taxes ever really equivalent? Evidence from a real-effort experiment with real goods," European Economic Review, Elsevier, vol. 56(6), pages 1200-1219.
    2. Stephens, Thomas A & Tyran, Jean-Robert, 2012. "“At least I didn’t lose money” Nominal Loss Aversion Shapes Evaluations of Housing Transactions," CEPR Discussion Papers 9198, C.E.P.R. Discussion Papers.
    3. Peter Kooreman & Henriëtte Prast, 2010. "What Does Behavioral Economics Mean for Policy? Challenges to Savings and Health Policies in the Netherlands," De Economist, Springer, vol. 158(2), pages 101-122, June.
    4. Giam Pietro Cipriani & Angelo Zago & Diego Lubian, 2008. "Money Illusion: Are Economists Different?," Economics Bulletin, AccessEcon, vol. 1(3), pages 1-9.
    5. Ehrmann, Michael, 2006. "Rational inattention, inflation developments and perceptions after the euro cash changeover," Working Paper Series 588, European Central Bank.
    6. Stix, Helmut, 2009. "Perceived inflation and the euro: Evidence from an Austrian survey," European Journal of Political Economy, Elsevier, vol. 25(4), pages 547-561, December.
    7. Thomas A. Eife, 2006. "Price setting behaviour and price setting regulations at the euro changeover," Bank of Estonia Working Papers 2006-06, Bank of Estonia, revised 12 Oct 2006.
    8. Michael Ehrmann, 2011. "Inflation Developments and Perceptions after the Euro Cash Changeover," German Economic Review, Verein für Socialpolitik, vol. 12(1), pages 33-58, February.
    9. repec:ebl:ecbull:v:1:y:2008:i:3:p:1-9 is not listed on IDEAS
    10. Ernst Fehr & Jean-Robert Tyran, 2005. "Individual Irrationality and Aggregate Outcomes," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 43-66, Fall.
    11. Sotiris Vandoros, 2013. "My five pounds are not as good as yours, so I will spend them," Experimental Economics, Springer;Economic Science Association, vol. 16(4), pages 546-559, December.
    12. 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.
    13. Bittschi, Benjamin & Duppel, Saskia, 2015. "Did the introduction of the euro lead to money illusion? Empirical evidence from Germany," ZEW Discussion Papers 15-058, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.

    More about this item


    behavioral economics; quasi-experiment; money illusion;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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