A key concept in economics is fungibility – that a “dollar is a dollar is a dollar.” However, money also carries cultural and social significance. In The Social Meaning of Money, Viviana Zelizer argues that people attach different meanings to different income sources. A new publication from FAI Executive Director Jonathan Morduch reviews Zelizer’s book and applies key lessons to the economic study of poor households:
Economists are more comfortable with the idea of earmarking funds in particular saving accounts (a mainstay of behavioral economics) than with the idea of earmarking particular income sources. The accumulating evidence echoes the archival evidence in Zelizer (1994), however, showing that earmarking income is a common mode of budgeting, especially when resources are scarce and relationships within households are conflictual. There is much more work to be done in exploring the phenomenon with an economic lens.
To read the complete publication, click here.