Seybold Report ISSN: 1533-9211
Dr. Sonam Arora, Dr. Diksha Sisodia
Vol 18, No 11 ( 2023 ) | Licensing: CC 4.0 | Pg no: 80-93 | Published on: 22-11-2023
A number of studies have identified the various behavioral aspects of investment and financial decision making. Mental Accounting is one of behavioural aspects used by individual, households to organize, track and evaluate their income and spending. This study aims to identify the presence of mental accounting process in Indian households. The research first determines the existence of mental accounting system by replicating the concept of reference point through integration and segregation of gain and loss in Indian households with the help of vignettes. The results showed that mental accounting induce integration of losses and gains which occur at same time, also segregate small losses from higher gains. Secondly, it investigates whether there are any differences in mental accounting processes based on different demographic variables i.e. gender, age, education, income and occupation. The result shows different education level and income levels have a significant influence on the process of Mental Accounting.
Mental Accounting, Mental Budgeting, Prospect Theory, Households, Vignettes JEL Classification Code: G12, G24, G41,