Anchoring Effects in the HRS: Experimental and Nonexperimental Evidence

The Health and Retirement Study (HRS) and a number of other major household surveys use unfolding brackets to reduce item nonresponse. However, the initial entry point into a bracketing sequence is likely to act as an anchor or point of reference to the respondent. For example, when the initial entry point is high the distribution will be shifted to the right, leading one to believe that holdings of the particular asset are greater than they truly are. This paper analyzes some experimental data on housing value from HRS wave 3 for anchoring effects. The paper also compares the distributions of assets in HRS waves 1 and 2 for evidence about any anchoring effects that may have been caused by changes in the entry points between the waves. Both the experimental data on housing values and the nonexperimental data from HRS waves 1 and 2 on assets show anchoring effects.