Nonparametric Modeling of the Anchoring Effect in an Unfolding Bracket Design

TitleNonparametric Modeling of the Anchoring Effect in an Unfolding Bracket Design
Publication TypeReport
Year of Publication1999
AuthorsAlvarez, RVazquez, Melenberg, B, vanSoest, AHO
InstitutionTilburg, NE, Tilburg University, Center for Economic Research Discussion Paper
Call Numberwp_1999/VazquezAlvarez.pdf

Household surveys are often plagued by item non-response on economic variables of interest like income, savings or the amount of wealth. Manski (1989,1994, 1995) shows how, in the presence of such non-response, bounds on conditional quantiles of the variable of interest can be derived, allowing for any type of non-random response behavior. Including follow up categorical questions in the form of unfolding brackets for initial item non-respondents, is an effective way to reduce complete item non-response. Recent evidence, however, suggests that such design is vulnerable to a psychometric bias known as the anchoring effect. In this paper, we extend the approach by Manski to take account of the information provided by the bracket respondents. We derive bounds which do and do not allow for the anchoring effect. These bounds are applied to earnings in the 1996 wave of the Health and Retirement Survey (HRS). The results show that the categorical questions can be useful to increase precision of the bounds, even if anchoring is allowed for.

Endnote Keywords

nonparametric models/unfolding bracket design/anchoring effect/item nonreponse/bounding intervals/nonparametrics

Endnote ID


Citation Key5391