Dedi Purwana, Agung Dharmawan Buchdadi, Ari Warokka
This study aims at exploring the effect of money illusion phenomenon among middle-lower income people living in Jakarta. By using a modified questionnaire, which was used in the prior similar theme, we tested whether the respondents' demographic characteristics, such as education, occupation, living expense, and family pattern of monthly living expense were the determinants or not from a sample of 90 respondents. Those respondents were used to observe the attitude of object study on two aspects i.e. income and transaction. The results revealed that the metropolises, which were living in the big city like Jakarta and were assumedly sufficient-educated, were not illusion free on transaction. Meanwhile, the family pattern on monthly living expense did not influence the transaction aspect. Another interesting empirical finding was the losing immune of the entrepreneurs' logical mind (i.e. the ability to measure economic matters from the relative perspective), which was indicated the significance regression coefficient of diluted-perception on nominal number, contributed to a big portion of the occurrence of this phenomenon. The study argued that habitual family pattern on monthly living expense played important role to the increasing influence of money illusion on those lived in urban city and were previously assumed well-educated and comprehend the concept of time value of money (TVM).
Faculty of Economics, State University of Jakarta, Indonesia; Othman Yeop Abdullah Graduate School of Business, Universiti Utara Malaysia, Malaysia
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