How threatening are transformations of happiness scales to subjective wellbeing research?
Caspar Kaiser and
INET Oxford Working Papers from Institute for New Economic Thinking at the Oxford Martin School, University of Oxford
Two recent papers argue that many results based on ordinal reports of happiness can be reversed with suitable monotonic increasing transformations of the associated happiness scale (Bond and Lang 2019; Schröder and Yitzhaki 2017). If true, empirical research utilizing such reports is in trouble. Against this background, we make four main contributions. First, we show that reversals are fundamentally made possible by explanatory variables having heterogenous effects across the distribution of happiness. We derive a simple test of whether reversals are possible by relabelling the scores of reported happiness and deduce bounds for ratios of coefficients under any labelling scheme. Second, we argue that in cases where reversals by relabelling happiness scores are impossible, reversals using an alternative method of Bond and Lang, which is based on ordered probit regressions, are highly speculative. Third, we make apparent that in order to achieve reversals, the analyst must assume that respondents use the response scale in a strongly non-linear fashion. However, drawing from the economic and psychological literature, we present arguments and evidence which suggest that respondents likely use response scales in an approximately linear manner. Fourth, using German SOEP data, we provide additional empirical evidence on whether reversals of effects of standard demographic variables are both possible and plausible. It turns out that reversals by either relabelling or by using Bond & Lang's approach are impossible or implausible for almost all variables of interest. Although our analysis uses happiness as a special case, our theoretical considerations are applicable to any type of subjective ordinal report.
Keywords: ordinal reports; transformations of cardinal scales; happiness; subjective wellbeing; life satisfaction; Easterlin Paradox; General Social Survey; German Socio-Economic Panel (search for similar items in EconPapers)
JEL-codes: C25 I31 (search for similar items in EconPapers)
Pages: 43 pages
New Economics Papers: this item is included in nep-hap and nep-isf
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Working Paper: How Threatening Are Transformations of Happiness Scales to Subjective Wellbeing Research? (2020)
Working Paper: How threatening are transformations of happiness scales to subjective wellbeing research? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:amz:wpaper:2020-19
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