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Embedding as a pitfall for survey‐based welfare indicators: evidence from an experiment

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  • Clemens Hetschko
  • Louisa von Reumont
  • Ronnie Schöb

Abstract

Welfare measurement using multiple indicators requires knowledge about how individuals weight different aspects of wellbeing. The better life index provides a way of resolving this individual level weighting issue. It invites people to weight 11 dimensions, embedding measurable indicators. Ideally, the specific embedding of the same indicators should not change their weights in a welfare function. Our experiment shows, however, that varying the embedding structure decisively affects people's weightings, i.e. we observe strong embedding effects. The better life index hence fails to measure citizens’ true preferences. Embedding thus opens a gateway to manipulating survey‐based welfare measures.

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  • Clemens Hetschko & Louisa von Reumont & Ronnie Schöb, 2019. "Embedding as a pitfall for survey‐based welfare indicators: evidence from an experiment," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 182(2), pages 517-539, February.
    • Handle: RePEc:bla:jorssa:v:182:y:2019:i:2:p:517-539
    DOI: 10.1111/rssa.12410
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    1. Clemens Hetschko & Louisa von Reumont & Ronnie Schöb, 2019. "Die Schwierigkeit, soziale Wohlfahrt zu messen: Einbettungseffekte im OECD Better Life Index," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 72(18), pages 24-26, September.

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    More about this item

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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