Anchoring and Acquiescence Bias in Measuring Assets in Household Surveys

Cognitive psychology has identified and studied extensively a number of cognitive anomalies that may be important for the assessment of the economic status of individuals and households. In particular the use of brackets to elicit information about income and assets in surveys of households can interact with acquiescence bias and anchoring to cause bias in the estimates of the distributions of income and assets. This paper uses data from the Health and Retirement Study and the Asset and Health Dynamics Study to find that, as predicted by psychology, bracketing can produce bias in population estimates of assets.