Can subjective expectations data be used in choice models? evidence on cognitive biases
A pervasive concern with the use of subjective data in choice models is that the data are biased and endogenous. This paper examines the extent to which cognitive biases plague subjective data, specifically addressing 1) whether cognitive dissonance affects the reporting of beliefs, and 2) whether individuals exert sufficient mental effort when probed about their subjective beliefs. For this purpose, I collect a unique panel data set of Northwestern University undergraduates that contains their subjective expectations about outcomes specific to different majors in their choice set. I do not find evidence of cognitive biases systematically affecting the reporting of beliefs: By analyzing patterns of belief updating, I can rule out cognitive dissonance being a serious concern in the current setting. Moreover, there seems to be no systematic (nonclassical) measurement error in the reporting of beliefs. In the reported beliefs for the various majors, I find no systematic patterns in mental recall of previous responses or in the extent of rounding. Comparison of subjective beliefs with objective measures suggests that students have well-formed expectations. Overall, the results paint a favorable picture for the use of subjective expectations data in choice models.
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): 26 (2011)
Issue (Month): 3 (04)
|Contact details of provider:|| Web page: http://www.interscience.wiley.com/jpages/0883-7252/|
|Order Information:|| Web: http://www3.interscience.wiley.com/jcatalog/subscribe.jsp?issn=0883-7252 Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Adeline Delavande, 2008.
"Pill, Patch, Or Shot? Subjective Expectations And Birth Control Choice,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(3), pages 999-1042, 08.
- Delavande, Adeline, 2005. "Pill, Patch or Shot? Subjective Expectations and Birth Control Choice," CEPR Discussion Papers 4856, C.E.P.R. Discussion Papers.
- Todd Stinebrickner & Ralph Stinebrickner, 2008.
"Learning About Academic Ability and the College Drop-Out Decision,"
University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers
20086, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
- Todd Stinebrickner & Ralph Stinebrickner, 2012. "Learning about Academic Ability and the College Dropout Decision," Journal of Labor Economics, University of Chicago Press, vol. 30(4), pages 707 - 748.
- Todd R. Stinebrickner & Ralph Stinebrickner, 2009. "Learning about Academic Ability and the College Drop-out Decision," NBER Working Papers 14810, National Bureau of Economic Research, Inc.
- Lance Lochner, 2005.
"Individual Perceptions of the Criminal Justice System,"
2005 Meeting Papers
452, Society for Economic Dynamics.
- Lance Lochner, 2007. "Individual Perceptions of the Criminal Justice System," American Economic Review, American Economic Association, vol. 97(1), pages 444-460, March.
- Lance Lochner, 2003. "Individual Perceptions of the Criminal Justice System," NBER Working Papers 9474, National Bureau of Economic Research, Inc.
- Hugo Benitez-Silva & Moshe Buchinsky & Hiu Man Chan & Sofia Cheidvasser & John Rust, 2000.
"How Large is the Bias is Self-Reported Disability?,"
NBER Working Papers
7526, National Bureau of Economic Research, Inc.
- Hugo Ben�tez-Silva & Moshe Buchinsky & Hiu Man Chan & Sofia Cheidvasser & John Rust, 2004. "How large is the bias in self-reported disability?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(6), pages 649-670.
- Hugo Benitez-Silva & Moshe Buchinsky & Hiu Man Chan & Sofia Cheidvasser & John Rust, 2000. "How Large is the Bias in Self-Reported Disability?," Working Papers 2000-01, Brown University, Department of Economics.
- Arcidiacono, Peter, 2004.
"Ability sorting and the returns to college major,"
Journal of Econometrics,
Elsevier, vol. 121(1-2), pages 343-375.
- Offerman, Theo & Sonnemans, Joep & Schram, Arthur, 1996. "Value Orientations, Expectations and Voluntary Contributions in Public Goods," Economic Journal, Royal Economic Society, vol. 106(437), pages 817-45, July.
- Delavande, Adeline & Giné, Xavier & McKenzie, David, 2011.
"Measuring subjective expectations in developing countries: A critical review and new evidence,"
Journal of Development Economics,
Elsevier, vol. 94(2), pages 151-163, March.
- Delavande, Adeline & Gine, Xavier & McKenzie, David, 2009. "Measuring Subjective Expectations in Developing Countries: A Critical Review and New Evidence," Policy Research Working Paper Series 4824, The World Bank.
- Charles F. Manski & Elie Tamer, 2002. "Inference on Regressions with Interval Data on a Regressor or Outcome," Econometrica, Econometric Society, vol. 70(2), pages 519-546, March.
- Dean R. Hyslop & Guido W. Imbens, 2000.
"Bias from Classical and Other Forms of Measurement Error,"
NBER Technical Working Papers
0257, National Bureau of Economic Research, Inc.
- Hyslop, Dean R & Imbens, Guido W, 2001. "Bias from Classical and Other Forms of Measurement Error," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 475-81, October.
- Manski, Charles F. & Molinari, Francesca, 2010. "Rounding Probabilistic Expectations in Surveys," Journal of Business & Economic Statistics, American Statistical Association, vol. 28(2), pages 219-231.
- Muriel Niederle & Lise Vesterlund, 2005.
"Do Women Shy Away From Competition? Do Men Compete Too Much?,"
NBER Working Papers
11474, National Bureau of Economic Research, Inc.
- Muriel Niederle & Lise Vesterlund, 2005. "Do Women Shy Away from Competition? Do Men Compete too Much?," Discussion Papers 04-030, Stanford Institute for Economic Policy Research.
- Basit Zafar, 2009.
"College major choice and the gender gap,"
364, Federal Reserve Bank of New York.
- Moshe Buchinsky & Phillip Leslie, 2010. "Educational Attainment and the Changing U.S. Wage Structure: Dynamic Implications on Young Individuals' Choices," Journal of Labor Economics, University of Chicago Press, vol. 28(3), pages 541-594, 07.
When requesting a correction, please mention this item's handle: RePEc:wly:japmet:v:26:y:2011:i:3:p:520-544. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.