This paper highlights how the rationality assumption has become irrelevant in the light of irrationality-based superstitious practices and preference heterogeneity. | The income effect of irrational behaviour a psycho-economic analysis International Journal of Management IJM Volume 11 Issue 4 April 2020 pp. 98-107 Article ID IJM_11_04_012 Available online at http ijm JType IJM amp VType 11 amp IType 4 Journal Impact Factor 2020 Calculated by GISI ISSN Print 0976-6502 and ISSN Online 0976-6510 IAEME Publication Scopus Indexed THE INCOME EFFECT OF IRRATIONAL BEHAVIOUR A PSYCHO-ECONOMIC ANALYSIS Uma Charan Pati Assistant Professor School of Economics Gangadhar Meher University AmrutaVihar India Minakshi Biswal . Scholar in . University Sambalpur India Sudhanshu Sekhar Rath Former Vice Chancellor Gangadhar Meher University AmrutaVihar Sambalpur-768004 India ABSTRACT The standard economic theorization is based on the neo-classical rationality postulate. But irrational activities and superstitious practices impact a wide range of decisions and choices in our day today life. Dissection of irrational behaviour of an individual is not so simple to comprehend but not impossible too. The emergence of the Behavioural Economics paradigm has recognized the psycho-economic importance and the socio-cultural effects of irrational beliefs and superstitions-driven activities on the lives of the common people. This paper highlights how the rationality assumption has become irrelevant in the light of irrationality-based superstitious practices and preference heterogeneity. Choice failure is caused by such realistic irrationalities further leading to capability deprivations. In the present study 100 participants have been sampled from both rural and urban vicinity of Bargarh district of Odisha to examine the linkages between monthly income and irrational behaviour represented through households spending on various superstitious activities and practices. Through the use of descriptive and inferential statistics it has been proved that irrational behavioural patterns have an income effect and .
