The Measurement-Unit Bias: People Walk or Drive Less to Save a Constant Money Amount When Answering in Meters Compared to Miles.

Abstract

Traditional economic theory suggests that when consumers decide whether to exert effort and travel to a remote store that is cheaper, the decision should compare the time and effort of travelling the relevant distance to the money that can be saved. Our research examined whether the unit of distance measurement, meters or miles, affects the actual distance an individual is willing to travel to save a certain amount of money. We studied the cases of both walking and driving to the remote store. We found in both cases that participants were willing to travel a greater distance for the same amount saved when they answered in miles. This supports our hypothesis, grounded in the literature on heuristics and biases, that the nominal value (which is smaller in miles) affects decisions even though it should be irrelevant from a rational perspective. We denote this behavior as the Measurement-Unit Bias. These findings have important implications for consumer behavior and marketing strategies.