The Weight of Price - On the Structural Fomation of (Nominal) Market Prices

41 Pages Posted: 19 Nov 2012

See all articles by Tarek Josef el Sehity

Tarek Josef el Sehity

Institute of Cognitive Sciences and Technologies; Institute of Psychology

Date Written: January 11, 2006


A new method to the investigation of nominal prices is presented. Taking into account (a) the weight of a number’s digits, (b) the build-in characteristics of cardinal numbers in decimal notation, and (c) a probable misconception of decimal notation, the main features of nominal prices are demonstrated to be well predictable: the probability of market prices’ first digits obeys Benford’s Law due to (b); the length of prices, and the distribution of digits on the consecutive positions are determined by a price’s first digit, as well as by (a) and (c). A secondary data analysis from el Sehity, Hoelzl and Kirchler (2005) is undertaken on price data from 10 EMU-countries before and after the transition to the euro. Price structures of the former national currencies re-established in euro within one year according to (a), (b), and (c).

Keywords: Nominal Market Price, Price Digits, Benford's Law, Money Illusion

JEL Classification: D49, E49, P22

Suggested Citation

el Sehity, Tarek Josef, The Weight of Price - On the Structural Fomation of (Nominal) Market Prices (January 11, 2006). Available at SSRN: or

Tarek Josef El Sehity (Contact Author)

Institute of Cognitive Sciences and Technologies ( email )

Via San Martino della Battaglia 44
Roma, RM 00185


Institute of Psychology ( email )

Freudplatz 1
Vienna, 1020
+43 664 7394 9337 (Phone)
+43 1 798 40 98 20 (Fax)


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