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Knowledge and Preference in Reporting Financial Information


  • Honggao Cao

    (University of Michigan)

  • Daniel H. Hill

    (University of Michigan)


This article models respondent behavior in a financial survey with a framework explicitly integrating a respondent’s knowledge of and willingness to reveal his or her financial status. Whether a respondent provides a valid answer, a “don’t know”, or a “refusal” to a financial question depends on the interaction of his or her financial knowledge and preferences regarding revealing the knowledge. Using asset response and nonresponse data from the Health and Retirement Study (2000), we found that knowledge and preferences play interrelated roles in reporting financial information, that a respondent’s age, gender, education, and race and ethnicity are important predictors of respondent behavior, and that race and ethnicity affect a respondent behavior only via their influence on preferences, while gender only via its influence on knowledge. We also found strong heterogeneity in respondents’ financial knowledge and their willingness to reveal the knowledge.

Suggested Citation

  • Honggao Cao & Daniel H. Hill, 2005. "Knowledge and Preference in Reporting Financial Information," Working Papers wp100, University of Michigan, Michigan Retirement Research Center.
  • Handle: RePEc:mrr:papers:wp100

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    References listed on IDEAS

    1. Jeanne M. Hogarth, 1988. "Accepting an Early Retirement Bonus an Empirical Study," Journal of Human Resources, University of Wisconsin Press, vol. 23(1), pages 21-33.
    2. Charles Brown, "undated". "Early Retirement Windows," Pension Research Council Working Papers 98-17, Wharton School Pension Research Council, University of Pennsylvania.
    3. Alan L. Gustman & Olivia S. Mitchell & Thomas L. Steinmeier, 1993. "The Role of Pensions in the Labor Market," NBER Working Papers 4295, National Bureau of Economic Research, Inc.
    4. Lumsdaine, Robin L. & Stock, James H. & Wise, David A., 1990. "Efficient windows and labor force reduction," Journal of Public Economics, Elsevier, vol. 43(2), pages 131-159, November.
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    Cited by:

    1. Hugo Benitez-Silva & Frank Heiland, 2006. "The Social Security Earnings Test Revisited: Information, Distortions, and Costs," Department of Economics Working Papers 06-04, Stony Brook University, Department of Economics.
    2. Hugo Benítez-Silva & Frank Heiland, 2007. "The social security earnings test and work incentives," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(3), pages 527-555.

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