September 2nd, 2007, 09:06
Do you feel richer in Thailand? There are those who talk (endlessly) about how it's more expensive at home. Some marketing experts have recently published the results of a survey that shows if you feel like a millionaire, you'll spend like one. I wonder how true that is of tourists in Thailand (and members of this Forum)
Before the Mexican government removed three zeros from its currency in 1993, anyone who wanted to know what it felt like to be a millionaire could hop across the Rio Grande and convert dollars into pesos. But tourists should beware: According to a study by three marketing professors, feeling like a millionaire tends to make you spend like one. The authors asked subjects in Hong Kong to imagine living on an after-tax budget of 9,000 Hong Kong dollars a month and to estimate how much they would pay each month for things like eating out, shopping for clothes, and going to movies and bars. The subjects were then asked to imagine living on 500 тАЬTristaniaтАЭ dollars, a fictional currency worth 18 Hong Kong dollars apieceтАФa budget equal in real value to their Hong Kong budget. When drawing up budgets, the subjects scrimped and saved their Tristania dollars but spent their Hong Kong dollars much more freely. This effect reversed when the authors made the Tristania dollars the less-valuable currency. This тАЬmoney illusionтАЭ may explain EuropeansтАЩ false perception that prices rose dramatically when the euro replaced zero-laden currencies like the Portuguese escudo and the Italian lira.
тАФтАЬOn the Perceived Value of Money: The Reference Dependence of Currency Numerosity Effects,тАЭ Klaus Wertenbroch, Dilip Soman, and Amitava Chattopadhyay, Journal of Consumer Research
Before the Mexican government removed three zeros from its currency in 1993, anyone who wanted to know what it felt like to be a millionaire could hop across the Rio Grande and convert dollars into pesos. But tourists should beware: According to a study by three marketing professors, feeling like a millionaire tends to make you spend like one. The authors asked subjects in Hong Kong to imagine living on an after-tax budget of 9,000 Hong Kong dollars a month and to estimate how much they would pay each month for things like eating out, shopping for clothes, and going to movies and bars. The subjects were then asked to imagine living on 500 тАЬTristaniaтАЭ dollars, a fictional currency worth 18 Hong Kong dollars apieceтАФa budget equal in real value to their Hong Kong budget. When drawing up budgets, the subjects scrimped and saved their Tristania dollars but spent their Hong Kong dollars much more freely. This effect reversed when the authors made the Tristania dollars the less-valuable currency. This тАЬmoney illusionтАЭ may explain EuropeansтАЩ false perception that prices rose dramatically when the euro replaced zero-laden currencies like the Portuguese escudo and the Italian lira.
тАФтАЬOn the Perceived Value of Money: The Reference Dependence of Currency Numerosity Effects,тАЭ Klaus Wertenbroch, Dilip Soman, and Amitava Chattopadhyay, Journal of Consumer Research