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Can Subjective Questions on Economic Welfare Be Trusted?

Martin Ravallion (), Kristen Himelein and Kathleen Beegle

Economic Development and Cultural Change, 2016, vol. 64, issue 4, 697 - 726

Abstract: While self-assessments of welfare have become popular for measuring poverty and estimating welfare effects, the methods can be deceptive given systematic heterogeneity in respondents’ scales. Little is known about this problem. We study scale heterogeneity using specially designed surveys in three countries: Tajikistan, Guatemala, and Tanzania. Respondents were asked to score stylized vignettes, as well as their own household. Diverse scales are in evidence, casting considerable doubt on the meaning of widely used summary measures such as subjective poverty rates. Nonetheless, under our identifying assumptions, only small biases are induced in the coefficients on widely used regressors for subjective poverty and welfare.

Date: 2016
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