Anchoring Bias in Recall Data: Evidence from Central America

36 Pages Posted: 28 Jun 2016

See all articles by Susan Godlonton

Susan Godlonton

International Food Policy Research Institute (IFPRI)

Manuel A. Hernandez

International Food Policy Research Institute (IFPRI)

Mike Murphy

International Food Policy Research Institute (IFPRI)

Date Written: May 20, 2016

Abstract

Understanding the magnitude and source of measurement biases in self-reported data is critical to effective economic policy research. This paper examines the role of anchoring bias in self-reports of objective and subjective outcomes under recall. The research exploits a unique panel survey data set collected over a three-year period from four countries in Central America. It assesses whether respondents use their reported value of specific measures from the most recent survey period as a cognitive heuristic when recalling the value from a previous period, while controlling for the value they reported earlier. We find strong evidence of sizable anchoring bias in self-reported retrospective indicators for both objective measures (household and per capita income, wages, and hours spent on the household’s main activity) and subjective measures (reports of happiness, health, stress, and well-being). In general, we also observe a larger bias in response to negative changes for objective indicators and a larger bias in response to positive changes for subjective indicators.

Keywords: CENTRAL AMERICA; LATIN AMERICA; AMERICAS; smallholders; microeconomics; measurement; methodologies; anchoring bias; recall data; self-reporting

JEL Classification: C80, O12, Q12

Suggested Citation

Godlonton, Susan and Hernandez, Manuel A. and Murphy, Mike, Anchoring Bias in Recall Data: Evidence from Central America (May 20, 2016). IFPRI Discussion Paper 1534, Available at SSRN: https://ssrn.com/abstract=2801254

Susan Godlonton (Contact Author)

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

HOME PAGE: http://www.ifpri.org

Manuel A. Hernandez

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Mike Murphy

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

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