Are Chinese Individuals prone to Money Illusion?
Using a unique dataset collected through a well-established survey, which was carried out in China, we examine whether Chinese individuals are prone to money illusion. In contrast to the outcomes for US individuals, we find that the Chinese are more likely to base decisions on the real monetary value of economic transactions. We put these observed differences in findings in perspective by comparing the economic conditions in the US and China.
Mees, H., & Franses, Ph.H.B.F.. (2011). Are Chinese Individuals prone to Money Illusion? (No. EI 2011-149/4). Discussion paper / Tinbergen Institute (pp. 1–30). Tinbergen Institute. Retrieved from http://hdl.handle.net/1765/26792