Location of Repository

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

By Stephen Pudney

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.

OAI identifier:

Suggested articles

Preview

Citations

  1. (1932). A Technique for the Measurement of Attitudes,
  2. (1998). Changes in the distribution of housing wealth
  3. (1982). Choice, Welfare and Measurement.
  4. (1994). Classical estimation methods for LDV models using simulation,
  5. (1985). Commodities and Capabilities,
  6. (1999). Development as Freedom.
  7. (2006). Developments in the measurement of subjective wellbeing,
  8. (2010). Estimating Income Poverty in the Presence of Measurement Error and Missing Data Problems,
  9. (1990). et seq) Human Development Report.
  10. (1994). Global optimization of statistical functions with simulated annealing,
  11. (2004). Happiness Quantified. A Satisfaction Calculus Approach.
  12. (2006). Happiness: Lessons from a New Science,
  13. (2008). Hedonic adaptation and the role of decision and experience utility in public policy,
  14. (2008). Housing markets and the economy: the assessment,
  15. (2007). How can measures of subjective wellbeing be used to inform public policy?
  16. (2004). How important is methodology for the estimates of the determinants of happiness?
  17. (2001). Identifying welfare effects from subjective questions,
  18. (2006). Income Mis-Measurement and the Estimation of Poverty Rates. An Analysis of Income Poverty in Albania. University of Essex: ISER Working Paper no.
  19. (2003). Measuring the wellbeing of the poor using income and consumption,
  20. (1999). Subjective wellbeing: Three decades of progress.
  21. (2008). Survey design and the analysis of satisfaction,
  22. (2006). The Capability Approach: Its Development, Critiques and Recent Advances,
  23. (2009). The development of capability indicators,
  24. (2008). The dynamics of perception: Modelling subjective wellbeing in a short panel,
  25. (2004). The Paradox of Choice: Why More is Less.
  26. (2006). The restless mind,
  27. (1997). Using expectations data to study subjective income expectations,
  28. (1993). When more pain is preferred to less: adding a better end,

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.