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Correcting for bias in retrospective data

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  • Zvi Eckstein
  • Ron Shachar

Abstract

When panel data are not available, retrospective data are used in the estimation of dynamic choice models. However, retrospective data are not reliable. Previous studies of voting choices, for example, have shown that respondents misreport their past choices in order to appear more consistent with their current choice. Such retrospective bias leads to inconsistent estimates, especially when there is state dependence in choices. Specifically, observed persistence in retrospective data may be due to (a) true state dependence, (b) unobserved heterogeneity, and (c) retrospective bias in reporting previous choices. Whereas Heckman in his 1981 study deals with (a) and (b), we introduce a method to estimate true state dependence while accounting for both unobserved heterogeneity and retrospective reporting bias. Our method is based on modeling the reporting behavior and integrating it into the estimation. The identification strategy is based on the correlation between the reported previous choices and current exogenous variables. Using data on Israeli voters, we find that the probability that a respondent whose vote intention in 1991 differed from his or her past voting choices would lie about their past choices is 0.23. Copyright © 2007 John Wiley & Sons, Ltd.

Suggested Citation

  • Zvi Eckstein & Ron Shachar, 2007. "Correcting for bias in retrospective data," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 657-675.
  • Handle: RePEc:jae:japmet:v:22:y:2007:i:3:p:657-675 DOI: 10.1002/jae.939
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    File URL: http://qed.econ.queensu.ca:80/jae/2007-v22.3/
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    References listed on IDEAS

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    1. Himmelweit, Hilde T. & Biberian, Marianne Jaeger & Stockdale, Janet, 1978. "Memory for Past Vote: Implications of a Study of Bias in Recall," British Journal of Political Science, Cambridge University Press, vol. 8(03), pages 365-375, July.
    2. Ron Shachar, 2003. "Party loyalty as habit formation," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 18(3), pages 251-269.
    3. Shachar, Ron, 1994. "A diagnostic test for the sources of persistence in individuals' decisions," Economics Letters, Elsevier, vol. 45(1), pages 7-13, May.
    4. Wolak, Frank A., 1989. "Testing inequality constraints in linear econometric models," Journal of Econometrics, Elsevier, vol. 41(2), pages 205-235, June.
    5. repec:cup:apsrev:v:73:y:1979:i:04:p:1055-1070_16 is not listed on IDEAS
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    Cited by:

    1. Jorik Vergauwen & Jonas Wood & David De Wachter & Karel Neels, 2015. "Quality of demographic data in GGS Wave 1," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 32(24), pages 723-774, March.
    2. Carmela Rizza & Daniela Ruggeri, 2016. "The performativity of Accounting Information System in interfirm relationships," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2016(1), pages 71-89.

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