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How Large is your Reference Group ?

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  • François Gardes

    (Crest)

  • Claude Montmarquette

    (Crest)

Abstract

We discuss how specifications of interdependent preferences found in the literature yield biased estimates of parameters of the underlying consumption or choice models. We present new specifications which alleviate this problem and permit an estimation of the size of the reference group. This last point, a key element affecting the estimation biases, has been overlooked in most studies. Using French individual data on the reported subjective poverty level, we show that the reference group is likely to be very small. L'interdépendance des préférences telle que spécifiée dans les études économétriques de consommation ou de choix individuel conduit à des estimateurs biaisés. Dans cette étude, nous présentons de nouvelles spécifications économétriques qui prennent en contre ce problème et qui permettent un estimé de la taille du groupe de référence. Ce dernier élément est ignoré dans les écrits actuels et s'avère très important pour juger des biais d'estimation. Nous montrons à l'aide de données françaises sur le niveau relatif et subjectif de pauvreté que ce groupe de référence est vraisemblablement de très petite taille.
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Suggested Citation

  • François Gardes & Claude Montmarquette, 2002. "How Large is your Reference Group ?," Working Papers 2002-55, Center for Research in Economics and Statistics.
    • Handle: RePEc:crs:wpaper:2002-55
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    References listed on IDEAS

    as
    1. Kapteyn, Arie, et al, 1997. "Interdependent Preferences: An Econometric Analysis," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(6), pages 665-686, Nov.-Dec..
    2. Aronsson, Thomas & Blomquist, Soren & Sacklen, Hans, 1999. "Identifying Interdependent Behaviour in an Empirical Model of Labour Supply," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(6), pages 607-626, Nov.-Dec..
    3. Alejandro Gaviria & Steven Raphael, 2001. "School-Based Peer Effects And Juvenile Behavior," The Review of Economics and Statistics, MIT Press, vol. 83(2), pages 257-268, May.
    4. François Gardes & Christian Loisy, 1998. "La pauvreté selon les ménages : une évaluation subjective et indexée sur leur revenu," Économie et Statistique, Programme National Persée, vol. 308(1), pages 95-112.
    5. Charles F. Manski, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(3), pages 531-542.
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    Cited by:

    1. Claude Montmarquette, 2008. "L'économétrie des données expérimentales : défis et opportunités," Économie et Prévision, Programme National Persée, vol. 182(1), pages 7-17.
    2. Murashov, Yaroslav & Ratnikova, Tatiana, 2016. "Under-reported income of Russian households," Russian Journal of Economics, Elsevier, vol. 2(1), pages 56-85.

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    More about this item

    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • D0 - Microeconomics - - General
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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