The Application and Inspiration of Mental Accounting: Spending of Different Income Source, Consumption During Valentine’s Day

Research Article
Open access

The Application and Inspiration of Mental Accounting: Spending of Different Income Source, Consumption During Valentine’s Day

Chunjie Chen 1 , Dongqian Xie 2*
  • 1 Chiway Repton School Xiamen    
  • 2 Malvern College Chengdu    
  • *corresponding author henry.xiedongqian@malvernchengdu.cn
Published on 13 September 2023 | https://doi.org/10.54254/2754-1169/9/20230405
AEMPS Vol.9
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-915371-45-4
ISBN (Online): 978-1-915371-46-1

Abstract

It is always being a common phenomenon of seeing people act differently in consumption of a same amount of money. In the practice of mental accounting, people place different sources of income in different account and spend with different attitude and belief. Studies are developing more explanations of the theory, but still there is a lack of awareness of how mental accounting would impact a person's life. This article provides a holistic review of mental accounting by presenting two practical applications through comparative analysis method which result in discussions and analyze about the theory, existed problems and workable solutions that can be applied. In the application part, the focus is on the difference between two sources of income in concern with mental accounting and their traces of laws to follow and the different performance and changes are made in sales of rose under different environment and scenarios. There are clear findings of how people treat their money in separate ways based on how they get it under different situations, such as wasteful spending of lottery payoff and carefully spending of salary. Thus, raising awareness of this effect could bring educational benefits that prevent irrational behavioral and unpleasant results.

Keywords:

annual income, lottery payoff, Valentine’s Day, rose, consumption pattern

Chen,C.;Xie,D. (2023). The Application and Inspiration of Mental Accounting: Spending of Different Income Source, Consumption During Valentine’s Day. Advances in Economics, Management and Political Sciences,9,331-338.
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References

[1]. Prelec D, Loewenstein G. The Red and the Black: Mental Accounting of Savings and Debt[J]. Marketing Science, 1998, 17(1):4-28.

[2]. Thaler R H . Commentary—Mental Accounting and Consumer Choice: Anatomy of a Failure[J]. Marketing Science, 2008.

[3]. MNK Saunders, P Lewis, A Thornhill, M Saunders. Research Methods for Business Students, 6/E[M].

[4]. Driscoll D L . Introduction to Primary Research: Observations, Surveys, and Interviews Introduction to Primary Research: Observations, Surveys, and Interviews. 2011.

[5]. Johnston M . Secondary Data Analysis: A Method of which the Time Has Come[J]. Qualitative & Quantitative Methods in Libraries, 2017, 3(3):619-626.

[6]. JSTOR, https://www.jstor.org/stable/2489664, last accessed 2022/8/30.

[7]. DOC88, https://www.doc88.com/p-5314544611560.html, last accessed 2022/8/29

[8]. Ariely, Dan, and Jeff Kriesler. Dollars and Sense How We Misthink Money and How to Spend Smarter. Thorndike Press Large Print, 2018.

[9]. Shefrin, H. M., & Thaler, R. H. (1992). Mental accounting, saving, and self-control. In G. Loewenstein & J. Elster (Eds.), Choice over time (pp. 287–330). Russell Sage Foundation. (A previous version of this chapter was published in "Economic Inquiry," Oct 1988)

[10]. Thaler R H , Shefrin H M . The Behavioral Life-Cycle Hypothesis[J]. Economic Inquiry, 1988, 26(4):609-643.

Cite this article

Chen,C.;Xie,D. (2023). The Application and Inspiration of Mental Accounting: Spending of Different Income Source, Consumption During Valentine’s Day. Advances in Economics, Management and Political Sciences,9,331-338.

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About volume

Volume title: Proceedings of the 2nd International Conference on Business and Policy Studies

ISBN：978-1-915371-45-4(Print) / 978-1-915371-46-1(Online)
Editor：Canh Thien Dang, Javier Cifuentes-Faura
Conference website: https://2023.confbps.org/
Conference date: 26 February 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.9
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Prelec D, Loewenstein G. The Red and the Black: Mental Accounting of Savings and Debt[J]. Marketing Science, 1998, 17(1):4-28.

[2]. Thaler R H . Commentary—Mental Accounting and Consumer Choice: Anatomy of a Failure[J]. Marketing Science, 2008.

[3]. MNK Saunders, P Lewis, A Thornhill, M Saunders. Research Methods for Business Students, 6/E[M].

[4]. Driscoll D L . Introduction to Primary Research: Observations, Surveys, and Interviews Introduction to Primary Research: Observations, Surveys, and Interviews. 2011.

[5]. Johnston M . Secondary Data Analysis: A Method of which the Time Has Come[J]. Qualitative & Quantitative Methods in Libraries, 2017, 3(3):619-626.

[6]. JSTOR, https://www.jstor.org/stable/2489664, last accessed 2022/8/30.

[7]. DOC88, https://www.doc88.com/p-5314544611560.html, last accessed 2022/8/29

[8]. Ariely, Dan, and Jeff Kriesler. Dollars and Sense How We Misthink Money and How to Spend Smarter. Thorndike Press Large Print, 2018.

[9]. Shefrin, H. M., & Thaler, R. H. (1992). Mental accounting, saving, and self-control. In G. Loewenstein & J. Elster (Eds.), Choice over time (pp. 287–330). Russell Sage Foundation. (A previous version of this chapter was published in "Economic Inquiry," Oct 1988)

[10]. Thaler R H , Shefrin H M . The Behavioral Life-Cycle Hypothesis[J]. Economic Inquiry, 1988, 26(4):609-643.

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