Construct · 1 fields · 1 citations

money illusion: a standalone construct

One name. One construct. A landmark on the map.

● anchor · a standalone construct Nearest construct by meaning·not indexed
moneyillusion1 CONSTRUCTMoney illusionSHAFIR ET AL. · 1997

A single standalone construct; nearby constructs are located against it in the Collider. Tap a field for its definition, unit, and measures.

Behavioural economics

Thinking in nominal rather than real terms

Money illusion is the tendency to think about money in nominal terms (its face value) rather than in real terms adjusted for inflation, so that people treat a raise that trails inflation as a gain, or resist a nominal wage cut more than an equivalent real cut caused by inflation. Shafir, Diamond, and Tversky's 1997 Money illusion gave experimental evidence that people hold both nominal and real representations and are swayed by the nominal frame. The referent is a cognitive bias in economic judgement, and it anchors a cluster of behavioural-economics constructs about framing and inflation.[1]

Unit
The degree to which judgements track nominal rather than inflation-adjusted values
Recovery means
Not applicable
Measured by
Demonstrated experimentally by framing the same real outcome in nominal versus real terms and comparing choices

Next

Run it through the Collider, or take the citations with you.

See how money illusion sits against neighbouring constructs in the Collider, or export every reference on this page in one click.

Open in ColliderExport BibTeXReport this entry

Nearby constructs

bias6 fields · 8 citationsjingle · one name, six constructscluster4 fields · 4 citationsjingle · one word, four constructs

References

  1. Shafir, E., Diamond, P., & Tversky, A. (1997). Money illusion. The Quarterly Journal of Economics, 112(2), 341–374. https://doi.org/10.1162/003355397555208

Cited on this page?

Confirm your construct, or correct us.

If your work is cited behind one of these entries, you know better than we do whether we captured the meaning right. Confirm it, suggest an edit, or dispute it, and your name goes on the entry as an author who has checked it, linked to your ORCID.

Claim your construct