The Denomination Effect On Spending Through Experimental Approach

  • Bambang Juanda IPB
Keywords: denomination, spending, laboratory study, field study


This paper discusses the denomination effect on shopping decisions in a more realisticspending scenario with various types of goods and relatively adequate denominations,including the specimen of IDR 200,000 banknote which was being investigated, in2015, to be printed by Bank Indonesia, and some other factors affecting spending. Thisresearch used an experimental design in a laboratory study and quasi-experimentaldesign in a field study. In the field study, the denomination of IDR 200,000 wasrepresented by using two pieces of the existing IDR 100,000 banknote, consideredas a single IDR 200,000 banknote. Therefore, if it was used for shopping, both twobanknotes of IDR 100,000 must be given to the seller even though the price of thepurchased goods was below IDR 100,000.This research showed consistent results between the laboratory and field studies, whichcan be summarized as follows: (1) total spending is not significantly different whenusing large or small denominations; (2) total expenditure is greater for consumers withlow self-control; and (3) the large denomination is very influential for goods with highprice, especially during unplanned shopping. This result implies the need for largerdenominations for regions with high priced goods.


Baumeister, F. Roy. (2002). Yielding to Temptation: Self-Control Failure, Impulsive
Purchasing, and Consumer Behavior. Journal of Consumer Research, 28(4), p.
Olivier Blanchard. (2009 ). Macroeconomics. Fifth Edition. Pearson Prentice Hall.
New Jersey.
Chen, N. Chau. (1976). Currency Denominations and the Price Level. Journal of
Political Economy, 84(1), p. 179–184.
Gourville, T. John. (1998). Pennies-a-Day: The Effect of Temporal Reframing on
Transaction Evaluation. Journal of Consumer Research, 24(4), p. 395–408.
Hoch, J. Steven dan Loewenstein, F. George. (1991). Time-Inconsistent Preferences
and Consumer Self-Control. Journal of Consumer Research, 17(4), p.492–507.
James M. Henderson, dan Richard E. Quandt. (1980). Microeconomic Theory: A
Mathematical Approach. Third Edition. McGraw-Hill. Singapore.
Juanda, Bambang, Annazah, S. Nur, Baeti, N. Falikhah. (2017). Analisis Pengaruh
Pertumbuhan Ekonomi, Inflasi, Jenis Barang, Jumlah Penghilangan Angka Nol,
Masa Transisi dan Tahapan Redenominasi terhadap Kinerja Perekonomian,
Mimeo. IPB.
Juanda Bambang. (2017). Ekonomi Eksperimental, Mimeo. IPB.
Juanda, Bambang, Novitasari, Wita, Annazah, S. Nur, Baeti N. Falikhah. (2016).
Analisis Pengaruh Denominasi Rp 200.000 dan Rp 500.000, Harga, serta
Perencanaan terhadap Belanja dengan Pendekatan Eksperimen, Mimeo. IPB.
Juanda, Bambang. (2015). Laporan Experimental Study: Analisa Kebutuhan
Masyarakat akan Rupiah Denominasi Rp 200.000 dan Identifikasi Efek
Psikologi yang Timbul (Denomination Effect), Mimeo. Bank Indonesia.
Juanda, Bambang. (2012). Experimental Economics in Indonesia: Lesson Learned
and Best Practices, Mimeo. IPB.
Bambang Juanda. (2009). Metodologi Penelitian Ekonomi dan Bisnis. Edisi Kedua. IPB
Press. Bogor.
Mishra Himanshu, Mishra Arul, dan Nayakankuppam Dhananjay. (2006). Money:
A Bias for the Whole. Journal of Consumer Research, 32(4), p. 541–549.
John Neter, Michael Kutner, Christopher Nachtsheim, William Wasserman. (1996).
Applied Linear Statistical Models. Mc Graw-Hill Companies. Inc, New York.
Pambudi, Andika, Juanda, Bambang, Priyarsono S. Domincus. (2014). Penentu
Keberhasilan Redenominasi Mata Uang: Pendekatan Historis dan
Eksperimental. Buletin Ekonomi Moneter dan Perbankan, 17(2), hal. 167-196.
Raghubir, Priya dan Srivastava, Joydeep. (2009). The Denomination Effect. Journal
of Consumer Research, 36(4), p. 701-713.
Smith L. Vernon. (1976). Experimental Economics: Induced Value Theory. The
American Economic Review, 66(2), p. 274-279.
Sumarwan, Ujang. (2014). Perilaku Konsumen: Teori dan Penerapannya dalam
Pemasaran. Ghalia Indonesia. Bogor.
How to Cite
Juanda, B. (2018). The Denomination Effect On Spending Through Experimental Approach. Buletin Ekonomi Moneter Dan Perbankan, 20(4), 461-496.