Nonparametric Tests of Panel Conditioning and Attrition Bias in Panel Surveys

Over the past decades there has been an increasing use of panel surveys at the household or individual level. Panel data have important advantages compared to independent cross sections, but also two potential drawbacks: attrition bias and panel conditioning effects. Attrition bias arises if dropping out of the panel is correlated with a variable of interest. Panel conditioning arises if responses are influenced by participation in the previous wave(s); the experience of the previous interview(s) may affect the answers to questions on the same topic, such that these answers differ systematically from those of respondents interviewed for the first time. In this study the authors discuss how to disentangle attrition and panel conditioning effects and develop tests for panel conditioning allowing for nonrandom attrition. First, the authors consider a nonparametric approach with assumptions on the sample design only, leading to interval identification of the measures for the attrition and panel conditioning effects. Second, the authors introduce additional assumptions concerning the attrition process, which lead to point estimates and standard errors for both the attrition bias and the panel conditioning effect. The authors illustrate their method on a variety of repeated questions in two household panels. The authors find significant panel conditioning effects in knowledge questions, but not in other types of questions. The examples show that the bounds can be informative if the attrition rate is not too high. In most but not all of the examples, point estimates of the panel conditioning effect are similar for different additional assumptions on the attrition process.