Non-Classical Measurement Error in Long-Term Retrospective Recall Surveys
Applied microeconomic researchers are beginning to use long-term retrospective survey data in settings where conventional longitudinal survey data are unavailable. However, inaccurate longterm recall could induce non-classical measurement error, for which conventional statistical corrections are less effective. In this paper, we use the unique Panel Study of Income Dynamics Validation Study to assess the accuracy of long-term retrospective recall data. We find underreporting of transitory variation which creates a non-classical measurement error problem.
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