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Open Access Publications from the University of California

Mental Representation of Budgeting Categories


Understanding how people mentally represent expenditures is crucial to understanding how they manage their money. In this paper, we report three studies that investigate people’s representation of budgeting categories by asking people to categorize common expenditures of money (e.g., rent, dining out, etc.). We then examine the implications of these taxonomic representations of expenditures for how people selectively restrict their uses of money (e.g., when overspending on one item, for which other items would people choose to spend less). We found that there is consensus in people’s representations of expenditures, and that both the category membership and taxonomic distance between items predict how people restrict their spending.

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