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Title:Perception and retrospection: The dynamic consistency of responses to survey questions on wellbeing PDF Logo
Authors:Pudney, Stephen
Issue Date:2010
Series/Report no.:cemmap working paper CWP12/10
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, assessments of past wellbeing are heavily contaminated by current circumstances, causing significant bias in measures of the level and change in welfare.
Subjects:financial wellbeing
perceptions
dynamic adjustment
BHPS
JEL:C23
C25
C33
C35
D84
Persistent Identifier of the first edition:doi:10.1920/wp.cem.2010.1210
Document Type:Working Paper
Appears in Collections:cemmap working papers, Centre for Microdata Methods and Practice, Institute for Fiscal Studies (IFS)

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