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Currency numerosity effects in Estonia   Mirjam Malahhov and Ivika Jager

Currency numerosity effects in Estonia

56 страниц. 2011 год.
LAP Lambert Academic Publishing
Currency used to be a symbol of each country, but in recent years there have been many changes in relation to common currency adoption. Studies have shown that people spend differently in currencies with different numeric value, even if the real value of goods and services is the same. The aim of this work is to investigate whether currency numerosity effects are present among the consumers in Estonia and what kind of implications these effects may have on the economy after euro adoption when the prices decrease by a factor of 15.6466. The used methodology includes two experiments which test the difference assessment account theory and interviews which give more insight to individual consumer perceptions. The authors find that, most likely, people in Estonia claim to spend more in euros because they perceive prices in smaller denomination as more affordable but the money illusion effect will not last long. This work should be of use to everybody who is interested in differential...
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