THE PRESENCE OF FRAMING EFFECT IN BUDGET PRACTICES: AN EXPERIMENTAL STUDY

Abstract

The objective of this paper is to analyze the possible presence of the framing effect on business practices related to the budget. To achieve the objective of the research experiment was conducted on a sample consisting of 99 graduate students in the city of Salvador, Bahia. Data analysis was performed by using the chi-square to measure the association between the framing and budgeting practices, and the application of factor analysis and ordinal regression model was used to verify that the involvement in budgeting practices can minimize the effect of framing. The principal results corroborate other assumptions indicated by empirical research flagged for this work. There was the presence of the framing effect in relation to the quality of preparation of budget estimates, presented in terms of success [failure], and in relation to the classification of the company's profitability, presented in terms of profit [loss]. Finally, it was found that involvement in budgeting practices is not able to minimize the presence of framing, with variable involvement with the budget process, present in the regression model, does not explain by itself the presence of the framing effect.