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Paper Moon is based on the novel Addie Pray (1971) by American novelist Joe David Brown (1915-1976). It was adapted for the screen by American screenwriter Alvin Sargent.

Those who have both seen the movie and read the novel report that the movie focuses on only a small part of the book. They recommend that, if you enjoyed the movie, you read the book for additional adventures shared by Addie (Tatum O'Neal) and Moze (Ryan O'Neal). They also note that, if you read the book and then see the movie, you might be disappointed by how much was left out of the film.

The story goes that, when director Peter Bogdanovich was considering the music for the movie, he heard the 1933 song "It's Only a Paper Moon" by American composers Billy Rose, Yip Harburg, and Harold Arlen. When Bogdanovich shared the title with his good friend Orson Welles, Welles liked the title "Paper Moon" so much that he told him to forget making the movie and just release the title.

Actually, there were two money tricks. The first one is performed at the shop where Moses is buying some ribbons for Addie. Addie performs it again at the carnival when she buys cotton candy. The trick goes like this. Let's say you've got $6 in your pocket. Let's also say the clerk has $14.85 in the cash register (probably she has more, but it's easier to understand this way). First, you buy something trivial, e.g., the ribbons for 15 cents, then you pay for it with a $5 bill. The clerk gives back the appropriate change ($4.85). In this moment, the transaction is as good as complete and both of you have the proper final amounts: you've spent $0.15, so you have $5.85 left, and the clerk has $15. You pocket the 85 cents. You take your 5 one-dollar bills and ask to exchange them for the $5 bill (the one you just gave her). You need this in order to create confusion, but, so far, it's an equal transaction: you still have $5.85 and the clerk still has $15. This is when you really perform the scam. While the clerk is holding the five $1 bills, you say "listen, why don't you just give me a 10 dollar bill? Here's the $5 bill, the five one-dollars are already there... ". You give her back the $5, she puts it together with the 5 one-dollar bills and hands you the $10 without realizing that, in fact, the one-dollar bills shouldn't be accounted at all in this final exchange. You just ripped her off of $5. So, in the end, you've got $10.85 and she's left with $10.

The second trick involves Moses going into a store and buying a tube of Ipana toothpaste and a pack of SenSens. He pays for it with $20, gets appropriate change, then leaves the store. Okay so far. Then Addie goes to the counter to purchase a bottle of perfume for 25 cents. She pays for it with a $5 bill and gets appropriate change ($4.75). Again, an equal transaction so far. As Addie prepares to leave the shop, however, she turns back and informs the clerk that she paid with a $20 bill. When the clerk balks, Addie begins to cry. The manager comes over, and Addie informs him that she paid with a $20 bill that was a birthday gift from her Aunt Helen in Wichita. She can prove it because Aunt Helen wrote "Happy Birthday Addie" on the face of the bill. The manager looks through the till and, sure enough, there is a $20 with "Happy Birthday Addie" written on it. He gives the $20 back to Addie, along with some candy. Addie leaves the store with $24.75 in her pocket, along with the perfume and the candy. And we all know who wrote "Happy Birthday Addie" on the $20 bill.