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Frame-of-reference bias in subjective welfare regressions

Author

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  • Beegle, Kathleen
  • Himelein, Kristen
  • Ravallion, Martin

Abstract

Past research has found that subjective questions about an individuals'economic status do not correspond closely to measures of economic welfare based on household income or consumption. Survey respondents undoubtedly hold diverse ideas about what it means to be"poor"or"rich."Further, this heterogeneity may be correlated with other characteristics, including welfare, leading to frame-of-reference bias. To test for this bias, vignettes were added to a nationally representative survey of Tajikistan, in which survey respondents rank the economic status of the theoretical vignette households, as well as their own. The vignette rankings are used to reveal the respondent's own scale. The findings indicate that respondents hold diverse scales in assessing their welfare, but that there is little bias in either the economic gradient of subjective welfare or most other coefficients on covariates of interest. These results provide a firmer foundation for standard survey methods and regression specifications for subjective welfare data.

Suggested Citation

  • Beegle, Kathleen & Himelein, Kristen & Ravallion, Martin, 2009. "Frame-of-reference bias in subjective welfare regressions," Policy Research Working Paper Series 4904, The World Bank.
    • Handle: RePEc:wbk:wbrwps:4904
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    Citations

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    Cited by:

    1. Asadullah, Mohammad Niaz & Chaudhury, Nazmul, 2012. "Subjective well-being and relative poverty in rural Bangladesh," Journal of Economic Psychology, Elsevier, vol. 33(5), pages 940-950.
    2. Senik, Claudia, 2014. "The French unhappiness puzzle: The cultural dimension of happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 106(C), pages 379-401.
    3. Sumon Kumar Bhaumik & Saul Estrin & Tomasz Mickiewicz, 2017. "Ownership identity, strategy and performance: Business group affiliates versus independent firms in India," Asia Pacific Journal of Management, Springer, vol. 34(2), pages 281-311, June.
    4. Leonardo Becchetti & Fabio Pisani, 2014. "Family Economic Well-Being, and (Class) Relative Wealth: An Empirical Analysis of Life Satisfaction of Secondary School Students in Three Italian Cities," Journal of Happiness Studies, Springer, vol. 15(3), pages 503-525, June.
    5. Leonardo Becchetti & Alessandra Pelloni, 2013. "What are we learning from the life satisfaction literature?," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 60(2), pages 113-155, June.
    6. Leonardo Becchetti & Andrew E. Clark & Elena Giachin Ricco, 2011. "The value of diplomacy: Bilateral relations and immigrant well-being," PSE Working Papers halshs-00580907, HAL.
    7. Paolo Li Donni & Juan Rodríguez & Pedro Rosa Dias, 2015. "Empirical definition of social types in the analysis of inequality of opportunity: a latent classes approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 673-701, March.
    8. Martin Ravallion, 2012. "Mashup Indices of Development," The World Bank Research Observer, World Bank, vol. 27(1), pages 1-32, February.
    9. Beegle, Kathleen & Himelein, Kristen & Ravallion, Martin, 2012. "Frame-of-reference bias in subjective welfare," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 556-570.
    10. Shaffer, Paul, 2013. "Ten Years of “Q-Squared”: Implications for Understanding and Explaining Poverty," World Development, Elsevier, vol. 45(C), pages 269-285.

    More about this item

    Keywords

    Rural Poverty Reduction; Housing&Human Habitats; Economic Theory&Research; Poverty Lines; Agricultural Knowledge&Information Systems;
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