Nonresponse and Focal Point Answers to Subjective Probability Questions

Kristin Kleinjans and Arthur van Soest ()

No 5272, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We develop and estimate a panel data model explaining the answers to questions about subjective probabilities, using data from the US Health and Retirement Study. We explicitly account for nonresponse, rounding, and focal point “50 percent” answers. Our results indicate that for three of the four questions considered, almost all 50 percent answers can be explained by rounding. We also find observed and unobserved heterogeneity in the tendencies to report rounded values or a focal answer, explaining persistency in 50 percent-answers over time. Incorporating rounding and focal answers changes some of the conclusions about the socio-economic factors that determine expectations.

Keywords: rounding; item nonresponse; expectations (search for similar items in EconPapers)
JEL-codes: C81 D84 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2010-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published - published as 'Rounding, Focal Point Answers and Nonresponse to Subjective Probability Questions' in: Journal of Applied Econometrics, 2014, 29 (4), 567 - 585

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