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Frame-of-reference bias in subjective welfare regressions, Volume 1
 
Author:Beegle, Kathleen; Himelein, Kristen; Ravallion, Martin; Country:World;
Date Stored:2009/09/29Document Date:2009/04/01
Document Type:Policy Research Working PaperSubTopics:Rural Poverty Reduction; Economic Theory & Research; Housing & Human Habitats; Poverty Lines; Agricultural Knowledge and Information Systems
Language:EnglishMajor Sector:Energy and mining; Health and other social services; Finance; Transportation
Rel. Proj ID:1W-Lsms Iv: Research For Improving Survey Data -- -- P102013;Region:The World Region
Report Number:WPS4904Sub Sectors:Other social services; Micro- and SME finance; General finance sector; General energy sector; General transportation sector
Collection Title:Policy Research working paper ; no. WPS 4904Paper is funded by the Knowledge for Change Program (KCP)TF No/Name:TF057207-KCP:; TF092149-PANEL HOUSEHOLD SURVEYS AND AGRICULTURE IN TANZANI; TF053580-NORWEGIAN GRANT FOR GENDER MAINSTREAMING
Volume No:1  

Summary: Past research has found that subjective questions about an individuals' economic status do not correspond closely to measures of economic welfare based on household income or consumption. Survey respondents undoubtedly hold diverse ideas about what it means to be "poor" or "rich." Further, this heterogeneity may be correlated with other characteristics, including welfare, leading to frame-of-reference bias. To test for this bias, vignettes were added to a nationally representative survey of Tajikistan, in which survey respondents rank the economic status of the theoretical vignette households, as well as their own. The vignette rankings are used to reveal the respondent's own scale. The findings indicate that respondents hold diverse scales in assessing their welfare, but that there is little bias in either the economic gradient of subjective welfare or most other coefficients on covariates of interest. These results provide a firmer foundation for standard survey methods and regression specifications for subjective welfare data.

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