People evaluate money within budgets and transactions as well as in one overall total.
Theoretical modelA model for explaining behavior, not a direct test of this interface’s conversion effects.
Example
A fictional ¥3,000 cost may be judged differently as a monthly work expense or a one-off hobby purchase.
Why it works
Thaler’s model combines mental coding of gains and losses, transaction utility and household budgets. Testing different display periods is this site’s editorial application.
On the web
Make monthly and annual amounts comparable. If showing a daily equivalent, state the day-count assumption and actual total payment without implying daily billing.
When it backfires
Budgets differ between people. Emphasizing only a small unit can obscure the actual burden. The account does not establish the effect of a particular price display.
Sources
Models consumer behavior with transaction utility and household budgeting.
Thaler (1985). Mental Accounting and Consumer Choice. Open source