Behavioral Economics and Money

Topics: Behavioral economics, Psychology, Economics Pages: 11 (3098 words) Published: March 12, 2014
-Journal of Arts, Science & Commerce ■ E-ISSN 2229-4686 ■ ISSN 2231-4172

Ms Rimple Manchanda Taneja,
Assistant Professor,
Amity Law School II,
Amity University, Noida Sector, India.
In today’s materialistic environment, role of money is not limited to being a medium of exchange but has become means and end for our happiness and well being. Money is same universally but it’s the individual’s attitude towards it that makes the difference. One develops an attitude towards money on the basis of one’s experiences and situations that one encounters over lifetime. The concept of money attitude is multidimensional and it has been studied in various socioeconomic and cultural settings. There were many developments in money attitude area and various tools have been developed to measure money attitude and money related behavior. Thus the understanding of money attitude, factors determining attitude of an individual towards money and measurement of money attitude is not just important for academicians but also for psychologists, marketers, policy makers, sociologists and anthropologists. It is also of too much importance for administrators and management scholars to understand all the aspects of money systematically. This article summarizes various developments that have been made in this area and encapsulates the contribution of various researchers in this field. Further it brings in the scope of study of attitude towards money in developing countries like India. Keywords: Attitude towards Money, Money related Behaviour.

International Refereed Research Journal ■ ■ Vol.– III, Issue –3(3),July 2012 [94]

-Journal of Arts, Science & Commerce ■ E-ISSN 2229-4686 ■ ISSN 2231-4172

In today’s materialistic environment, role of money is not limited to being a medium of exchange but has become means and end for our happiness and well being. It is the life blood, as indispensable as pure drinking water for our survival. As emphasized by Feldman that in this dynamic world only one thing has been constantly important and that is ‘Money’ (Feldman, 1957). Money is important, be it any phase of business cycle or life cycle. With persuasion of western ideas on developing counties like India as well as rising pressure of market driven culture, the importance of money in one’s life is increasing day by day. Money is an essential and indispensable factor of our daily living and existence. It is important not only to take care of our social life but also forms an important ingredient for our emotional and pecuniary happiness. Money is powerful as it has ability to influence people’s well-being and cognition. For those who lack money, it acts as a motivator. Money also has power to provoke anxiety and unhappiness for those who have it in scarce (Furnham A., 1996) and for those who have money in abundance; it acts as a tool to make an impression, as a means to expound their supremacy and acts a symbol for status representation. Money as a motivator has been considered a powerful tool for economic growth and development of nation (Furnham and Argyle, 1998). Economic growth and development of nation depends to a large extent on its human capital. It has been researched that human capital can be motivated to work hard by offering higher monetary benefits and incentives (Lynn, 1991). Money is required to perform all economic and social activities. It has a bearing on our spending behavior, political outlook and our performance at workplace (Roberts & Sepulveda, 1999). MONEY ATTITUDE:

Money is same universally but it’s the individual’s attitude towards it that makes the difference. Thus, the study of attitude towards money has a significant substance in the study of consumer behavior (Prince, 1991). With increasing significance of money in one’s life in contemporary world, it is important to understand the attitude of people towards money because it is the money...

References: [1] Bailey, W. & Gustafson, W. (1991). An examination of the relationship between personality factors and
attitudes toward money
[2] Bailey, W.C. & Lown, J.M. (1993) A cross-cultural examination of the aetiology of attitudes towards
[3] Feldman, F.L. (1957) A new look at the family and its money. Journal of Home Economics, 49, 767–772
[4] Forman, N
[5] Furnham, A. (1984) Many sides of the coin: the psychology of money usage. Personality and
IndividualDifferences, 5, 501–509.
[6] Furnham, A. (1996), ``Attitudinal correlates and demographic predictors of monetary beliefs and
behaviors ' ', Journal of Organizational Behavior, Vol
[7] Furnham, A. and Argyle, M. (1998), The Psychology of Money, Routledge, London
[8] Goldberg, H
[10] Kirkcaldy, B., & Furnham, A. (1993). Predictors of beliefs about money. Psychological Reports, 73(3),
[11] Lim, K.B. & Teo, S.H. (1997) Sex, money and financial hardship, an empirical study of attitudes towards
money among undergraduates in Singapore
[12] Lown, J. M. & Cook, J. (1990). Attitudes toward seeking financial counseling: Instrument development.
[13] Lynn, M. (1991), ``Restaurant tipping: a reflection of customers ' evaluations of a service? ' ', Journal of
Consumer Research, Vol
[14] Mitchell, T.R Darkin S; Mickel, A; & Gray, S. (1998). The Measurement of Money Importance. Paper
Presented at the Annual Meeting of the Academy of Management, San Diego.
[15] Prince, M. (1991) Gender and money attitudes of young adults. gender and consumer behavior.
[16] Prince, M. (1993). Women, men, and money styles. Journal of Economic Psychology, 14(3), 175-182.
[17] Roberts, J.A. & Sepulveda, C.L. (1999). Demographics and money attitudes: A test of the Yamauchi and
Templer’s, (1982) money attitude scale in Mexico
[18] Rubinstein, C. R. (1981). Survey report on money. Psychology Today, 15 (5): 29-44
[19] Simmel, G
[20] Tang, T. L. P. (1992). The meaning of money revisited. Journal of Organizational Behavior, 13, 197-202.
[21] Tang, T. L. P. (1995). The development of a short money ethic scale: Attitudes toward money and pay
satisfaction revisited
[22] Tang, T.L.P., Furnham, A. and Davis, G. (2003), ``A cross-cultural comparison of the money ethic, the
Protestant work ethic and job satisfaction: Taiwan, the USA, and the UK ' ', International Journal of
[23] Tatzel, M. (2002). “Money worlds” and well-being: An integration of money dispositions, materialism
and price-related behavior
[24] Wernimont, P. and Fitzpatrick, S. (1972), “The meaning of money ' ', Journal of Applied Psychology, Vol.
[25] Yamauchi, K.T. & Templer, D.I. (1982) “The development of money attitude scale” Journal of
Personality Assessment, 46, 522–528.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Behavioral Economics Essay
  • ECONOMICS Research Paper
  • Economics Essay
  • economics Essay
  • Economics Essay
  • Economics Essay
  • Essay about Behavioral Economics Deck
  • Role of Money in Modern Economics Essay

Become a StudyMode Member

Sign Up - It's Free