published as 'Rounding, Focal Point Answers and Nonresponse to Subjective Probability Questions' in: Journal of Applied Econometrics, 2014, 29 (4), 567 - 585
We develop and estimate a panel data model explaining the answers to questions about subjective probabilities, using data from the US Health and Retirement Study. We explicitly account for nonresponse, rounding, and focal point “50 percent” answers. Our results indicate that for three of the four questions considered, almost all 50 percent answers can be explained by rounding. We also find observed and unobserved heterogeneity in the tendencies to report rounded values or a focal answer, explaining persistency in 50 percent-answers over time. Incorporating rounding and focal answers changes some of the conclusions about the socio-economic factors that determine expectations.
We use cookies to provide you with an optimal website experience. This includes cookies that are necessary for the operation of the site as well as cookies that are only used for anonymous statistical purposes, for comfort settings or to display personalized content. You can decide for yourself which categories you want to allow. Please note that based on your settings, you may not be able to use all of the site's functions.
Cookie settings
These necessary cookies are required to activate the core functionality of the website. An opt-out from these technologies is not available.
In order to further improve our offer and our website, we collect anonymous data for statistics and analyses. With the help of these cookies we can, for example, determine the number of visitors and the effect of certain pages on our website and optimize our content.