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Perception and retrospection: the dynamic consistency of responses to survey questions on wellbeing

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  • Pudney, Stephen

Abstract

Implementation of broad approaches to welfare analysis usually entails the use of 'subjective' welfare indicators. We analyse BHPS data on financial wellbeing to determine whether reported current and retrospective perceptions are consistent with each other and with the existence of a common underlying wellbeing concept. We allow for adjustment of perceptions in a vector ARMA model for panel data, with dependent variables observed ordinally and find that current perceptions exhibit slow adjustment to changing circumstances and retrospective assessments of past wellbeing are heavily contaminated by current circumstances, causing significant bias in measures of the level and change in welfare.

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  • Pudney, Stephen, 2010. "Perception and retrospection: the dynamic consistency of responses to survey questions on wellbeing," ISER Working Paper Series 2010-07, Institute for Social and Economic Research.
  • Handle: RePEc:ese:iserwp:2010-07
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    Cited by:

    1. Binder, Martin & Coad, Alex, 2013. "“I'm afraid I have bad news for you…” Estimating the impact of different health impairments on subjective well-being," Social Science & Medicine, Elsevier, vol. 87(C), pages 155-167.
    2. Anita Ratcliffe, 2015. "Wealth Effects, Local Area Attributes, and Economic Prospects: On the Relationship between House Prices and Mental Wellbeing," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(1), pages 75-92, March.
    3. Christopher R. Bollinger & Cheti Nicoletti & Stephen Pudney, 2012. "Two can live as cheaply as one... But three's a crowd," Discussion Papers 12/23, Department of Economics, University of York.
    4. Booker, Cara L. & Pudney, Stephen, 2013. "In sickness and in health? Comorbidity in older couples," ISER Working Paper Series 2013-30, Institute for Social and Economic Research.
    5. Anita Ratcliffe & Karl Taylor, 2013. "Who Cares about Stock Market Booms and Busts? Evidence from Data on Mental Wellbeing," Working Papers 2012021, The University of Sheffield, Department of Economics.
    6. Chadi, Adrian, 2014. "Dissatisfied with Life or with Being Interviewed? Happiness and Motivation to Participate in a Survey," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100505, Verein für Socialpolitik / German Economic Association.
    7. Orcun Kaya, 2014. "Is perceived financial inadequacy persistent?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(4), pages 636-654, December.
    8. Hernandez-Alava, Monica & Pudney, Stephen, 2015. "BICOP: a Stata command for fitting bivariate ordinal regressions with residual dependence characterised by a copula function and normal mixture marginals," Understanding Society Working Paper Series 2015-02, Understanding Society at the Institute for Social and Economic Research.
    9. Luisa Corrado & Majlinda Joxhe, 2016. "The Effect of Survey Design on Extreme Response Style: Rating Job Satisfaction," CEIS Research Paper 365, Tor Vergata University, CEIS, revised 08 Feb 2016.

    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations

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