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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

How can we assess the welfare of a society, its evolution over time and predict its change due to particular policy interventions? One way is to use survey-based welfare indicators such as the OECD Better Life Index. It invites people to weight a variety of quality of life indicators according to their individual preferences. 11 broad dimensions aggregate these indicators. Our experiment shows that people do not provide consistent ratings across differently labelled dimensions that embed the same indicators. They also do not adjust the rating of equally named dimensions changing sets of indicators. These results show that survey-based measures might suffer from strong embedding effects and, as a result, may fail to measure citizens’ true preferences for the indicators.

Suggested Citation

  • Clemens Hetschko & Louisa von Reumont & Ronnie Schöb, 2017. "Embedding as a Pitfall for Survey-Based Welfare Indicators: Evidence from an Experiment," CESifo Working Paper Series 6419, CESifo.
    • Handle: RePEc:ces:ceswps:_6419
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    References listed on IDEAS

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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

    Keywords

    beyond GDP; welfare measurement; survey-based welfare indicators; OECD Better Life Index; embedding effect;
    All these keywords.

    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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