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Hedonic recall bias. Why you should not ask people how much they earn

Author

Listed:
  • Alberto Prati

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

The empirical literature which explores the effect of wage on job satisfaction typically uses data drawn from social surveys. In these surveys, the amount of wage is reported by the respondents themselves: thus, the explanatory variable of the econometric models may differ from the true wage people earn. Our paper shows that the use of survey data can lead to considerable over-estimation of the importance of wage as a determinant of wage satisfaction. In particular, responses seem to be affected by a recall bias: people who are satisfied with their wage are more likely to over-report their wage in questionnaires. The more satisfied they are the more they over-report (and vice versa unsatisfied people). We name this behavioral disposition "hedonic recall bias".

Suggested Citation

  • Alberto Prati, 2017. "Hedonic recall bias. Why you should not ask people how much they earn," Post-Print hal-01676683, HAL.
    • Handle: RePEc:hal:journl:hal-01676683
    DOI: 10.1016/j.jebo.2017.09.002
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    Cited by:

    1. Marco Caliendo & Katrin Huber & Ingo E. Isphording & Jakob Wegmann, 2024. "On the Extent, Correlates, and Consequences of Reporting Bias in Survey Wages," Papers 2411.04751, arXiv.org.
    2. Kaiser, Caspar, 2022. "Using memories to assess the intrapersonal comparability of wellbeing reports," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 410-442.
    3. Lepinteur, Anthony & Waltl, Sofie R., 2020. "Tracking Owners' Sentiments: Subjective Home Values, Expectations and House Price Dynamics," Department of Economics Working Paper Series 299, WU Vienna University of Economics and Business.
    4. Suarez-Fernandez, Sara & Perez-Villadoniga, Maria J. & Prieto-Rodriguez, Juan, 2022. "Price salience in opinion polls and observed behavior: The case of Spanish cinema," Economic Modelling, Elsevier, vol. 111(C).
    5. Grissom, Jason A. & Timmer, Jennifer D. & Nelson, Jennifer L. & Blissett, Richard S.L., 2021. "Unequal pay for equal work? Unpacking the gender gap in principal compensation," Economics of Education Review, Elsevier, vol. 82(C).
    6. Ina Schöllgen & Norbert Kersten & Uwe Rose, 2019. "Income Trajectories and Subjective Well-Being: Linking Administrative Records and Survey Data," IJERPH, MDPI, vol. 16(23), pages 1-14, November.
    7. Pelz, Setu & Chindarkar, Namrata & Urpelainen, Johannes, 2021. "Energy access for marginalized communities: Evidence from rural North India, 2015–2018," World Development, Elsevier, vol. 137(C).
    8. Sara Suarez-Fernandez & Maria Jose Perez-Villadoniga & Juan Prieto-Rodriguez, 2018. "Are We (Un)Consciously Driven by First Impressions? Price Declarations vs. Observed Cinema Demand when VAT Increases," ACEI Working Paper Series AWP-02-2018, Association for Cultural Economics International, revised Jul 2018.
    9. Çavuşa, Osman & Bayhan, Isa & Ismail, Balarabe B., 2022. "An Overview of the Effect of Covid-19 on Household Food Waste: How Does the Pandemic Affect Food Waste at the Household Level?," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 13(01), January.
    10. Clémence Berson & Raphaël Lardeux & Claire Lelarge, 2021. "The Cognitive Load of Financing Constraints: Evidence from Large-Scale Wage Surveys," Working papers 836, Banque de France.
    11. Dong Lv & Shukun Qin & Rui Sun & Xuxin Jiang & Ruxia Cheng & Weimin Sun, 2025. "The Impact of Natural and Cultural Landscape Quality on Attachment to Place and the Intention to Recommend Tourism in a UNESCO World Heritage City," Land, MDPI, vol. 14(7), pages 1-33, July.

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    Keywords

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    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy

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