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Frame-of-reference bias in subjective welfare regressions

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  • Beegle, Kathleen
  • Himelein, Kristen
  • Ravallion, Martin

Abstract

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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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4904.

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Date of creation: 01 Apr 2009
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Handle: RePEc:wbk:wbrwps:4904

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Related research

Keywords: Rural Poverty Reduction; Housing&Human Habitats; Economic Theory&Research; Poverty Lines; Agricultural Knowledge&Information Systems;

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Cited by:
  1. Leonardo Becchetti & Alessandra Pelloni, . "What are we learning from the life satisfaction literature?," Working Papers 2, Department of the Treasury, Ministry of the Economy and of Finance.
  2. Leonardo Becchetti & Andrew E. Clark & Elena Giachin Ricca, 2011. "The Value of Diplomacy: Bilateral Relations and Immigrant Well-Being," CEIS Research Paper 190, Tor Vergata University, CEIS, revised 29 Mar 2011.
  3. Martin Ravallion, 2012. "Mashup Indices of Development," World Bank Research Observer, World Bank Group, World Bank Group, vol. 27(1), pages 1-32, February.
  4. Asadullah, Niaz & Chaudhury, Nazmul, 2012. "Subjective Well-Being and Relative Poverty in Rural Bangladesh," IZA Discussion Papers 6569, Institute for the Study of Labor (IZA).
  5. Shaffer, Paul, 2013. "Ten Years of “Q-Squared”: Implications for Understanding and Explaining Poverty," World Development, Elsevier, vol. 45(C), pages 269-285.
  6. repec:hal:wpaper:halshs-00580907 is not listed on IDEAS

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