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Probabilistic survey questions and incorrect answers: Retirement income replacement rates

  • van Santen, Peter
  • Alessie, Rob
  • Kalwij, Adriaan

We study responses to subjective retirement income replacement rate expectations questions in a survey of Dutch employees. One out of three respondents is unable to provide probabilities satisfying the requirements of a cumulative distribution function. We show that using probabilistic survey questions yields an endogenous sample selection when these individuals are removed from the sample, biasing the results toward more pessimistic expectations and excess uncertainty in the replacement rate. These biases are most prevalent for less-educated individuals.

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File URL: http://www.sciencedirect.com/science/article/pii/S0167268112000297
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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 82 (2012)
Issue (Month): 1 ()
Pages: 267-280

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Handle: RePEc:eee:jeborg:v:82:y:2012:i:1:p:267-280
Contact details of provider: Web page: http://www.elsevier.com/locate/jebo

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