DP16345 Limited Self-knowledge and Survey Response Behavior
|Author(s):||Armin Falk, Thomas Neuber, Philipp Strack|
|Publication Date:||July 2021|
|Keyword(s):||Lab Experiment, non-cognitive skills, preferences, rational inattention, survey research|
|JEL(s):||C83, C91, D83, D91, J24|
|Programme Areas:||Public Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=16345|
We study response behavior in surveys and show how the explanatory power of self-reports can be improved. First, we develop a choice model of survey response behavior under the assumption that the respondent has imperfect self-knowledge about her individual characteristics. In panel data, the model predicts that the variance in responses for different characteristics increases in self-knowledge and that the variance for a given characteristic over time is non-monotonic in self-knowledge. Importantly, the ratio of these variances identifies an individual's level of self-knowledge, i.e. the latter can be inferred from observed response patterns. Second, we develop a consistent and unbiased estimator for self-knowledge based on the model. Third, we run an experiment to test the model's main predictions in a context where the researcher knows the true underlying characteristics. The data confirm the model's predictions as well as the estimator's validity. Finally, we turn to a large panel data set, estimate individual levels of self-knowledge, and show that accounting for differences in self-knowledge significantly increases the explanatory power of regression models. Using a median split in self-knowledge and regressing risky behaviors on self-reported risk attitudes, we find that the R2 can be multiple times larger for above- than below-median subjects. Similarly, gender differences in risk attitudes are considerably larger when restricting samples to subjects with high self-knowledge. These examples illustrate how using the estimator may improve inference from survey data.