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

Edsel L. Beja
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Edsel L. Beja: Ateneo de Manila University

Philippine Review of Economics, 2017, vol. 54, issue 1, 47-62

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.

Keywords: Money illusion; subjective well-being; income; price; Philippines (search for similar items in EconPapers)
JEL-codes: C25 D60 I31 O53 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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Working Paper: Subjective well-being approach for testing money illusion: Evidence using data from Social Weather Stations (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:phs:prejrn:v:54:y:2017:i:1:p:47-62

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