Testing consumers' asymmetric perception of changes in household financial situation

Mauro Mastrogiacomo*

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

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.

Original languageEnglish
Pages (from-to)327-350
Number of pages24
JournalReview of Income and Wealth
Volume56
Issue number2
DOIs
Publication statusPublished - Jun 2010

Bibliographical note

Copyright:
Copyright 2010 Elsevier B.V., All rights reserved.

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