Premium
TESTING CONSUMERS' ASYMMETRIC PERCEPTION OF CHANGES IN HOUSEHOLD FINANCIAL SITUATION
Author(s) -
Mastrogiacomo Mauro
Publication year - 2010
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.2009.00371.x
Subject(s) - economics , perception , panel data , empirical evidence , survey data collection , public economics , econometrics , demographic economics , psychology , philosophy , statistics , mathematics , epistemology , neuroscience
Using empirical analysis, this study shows that individuals perceive negative changes in their financial situation as larger relative to positive changes. Evidence of this asymmetry is provided using survey data on individual expectations, perceptions, income, and wealth. The study's results are in line with results in the psychological‐economic literature but, contrary to that literature, are obtained by analyzing panel survey data, rather than experimental evidence. These results cast some doubts on the tendency of economists to treat symmetrically the relation between economic variables and income or wealth in their models.