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.

Additional Metadata
Keywords money illusion
JEL Prices, Business Fluctuations, and Cycles: General (jel E30), Money and Interest Rates: General (jel E40)
Publisher Tinbergen Institute
Persistent URL hdl.handle.net/1765/26792
Series Tinbergen Institute Discussion Paper Series
Journal Discussion paper / Tinbergen Institute
Citation
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