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Reference: Johannes Abeler and Felix Marklein, (2010). Fungibility, Labels, and Consumption. University of Nottingham.Citable link to this page:


Fungibility, Labels, and Consumption Series: CeDEx Discussion Paper Series

Abstract: Fungibility of money is a central assumption in the theory of consumer choice: anyunit of money is substitutable for another. This implies that the composition ofincome or wealth is irrelevant for consumption. We nd in a eld experiment thateven in a simple, incentivized setup many subjects do not treat money as fungible.When a label is attached to a part of their budget, subjects change consumptionaccording to the label. A controlled laboratory experiment conrms this result andfurther shows that subjects with lower cognitive abilities are more likely to violatefungibility. The ndings lend support to behavioral models of narrow bracketing andmental accounting. One implication of our results is that in-kind benets distortconsumption more strongly than usually assumed.

Bibliographic Details

Issue Date: 2010Identifiers

Urn: uuid:f785725d-32d1-4e0d-90ab-5d7ed0da16de Item Description

Type: info:eu-repo/semantics/workingPaper;

Language: en


Author: Johannes Abeler - - - Felix Marklein - - - - Bibliographic Details Issue Date: 2010 - Identifiers Urn: uuid:f785725d-32d1-4e0d-90



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