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Subjective well-being approach for testing money illusion-evidence using data from Social Weather Stations

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  • Edsel L. Beja Jr.

    (Ateneo de Manila University)

Abstract

This paper tests money illusion using measures of subjective well-being, nominal income, and price. It tests the hypothesis that there is no money illusion in the sense that proportional changes in both nominal income and price do not bring about a change in subjective well-being. The study uses food poverty data from Social Weather Stations as a proxy measure for nominal income and food Consumer Price Index inflation from the Philippine Statistics Authority as a proxy measure for price. The findings suggest no money illusion in general. More specifically, the findings provide conclusive evidence of no money illusion for the food-poor but not for the food-nonpoor.

Suggested Citation

  • Edsel L. Beja Jr., 2017. "Subjective well-being approach for testing money illusion-evidence using data from Social Weather Stations," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 54(1), pages 47-62, June.
    • Handle: RePEc:phs:prejrn:v:54:y:2017:i:1:p:47-62
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    Cited by:

    1. Beja, Edsel Jr., 2019. "Consumer Expectations Survey and Quarterly Social Weather Survey: Evidence of Convergent Validity and Causality," MPRA Paper 101074, University Library of Munich, Germany.

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    More about this item

    Keywords

    Money illusion; subjective well-being; income; price; Philippines;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D60 - Microeconomics - - Welfare Economics - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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