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Anchoring Bias in Recall Data: Evidence from Central America

Susan Godlonton, Manuel Hernandez and Mike Murphy

No 2016-11, Department of Economics Working Papers from Department of Economics, Williams College

Abstract: Understanding the magnitude and source of measurement biases in self-reported data is critical to effective economic policy research. This paper examines the role of anchoring bias in self-reports of objective and subjective outcomes under recall. The research exploits a unique panel survey data set collected over a three-year period from four countries in Central America. It assesses whether respondents use their reported value of specific measures from the most recent survey period as a cognitive heuristic when recalling the value from a previous period, while controlling for the value they reported earlier. We find strong evidence of sizable anchoring bias in self-reported retrospective indicators for both objective measures (household and per capita income, wages, and hours spent on the household's main activity) and subjective measures (reports of happiness, health, stress, and well-being). In general, we also observe a larger bias in response to negative changes for objective indicators and a larger bias in response to positive changes for subjective indicators.

Keywords: anchoring bias; recall data; self-reporting; smallholder farmers; Central America (search for similar items in EconPapers)
JEL-codes: C8 O12 Q12 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2016-05
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Journal Article: Anchoring Bias in Recall Data: Evidence from Central America (2018) Downloads
Working Paper: Anchoring bias in recall data: Evidence from Central America (2016) Downloads
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