Survey Research on Household Expectations and Preferences

A Conference Sponsored by the Health and Retirement Study and the Bureau of Labor Statistics, November 2 - 3, 2001, Institute for Social Research, University of Michigan

Background

For many years, survey collection of subjective data was guided primarily by the attitudinal research community, composed primarily of sociologists and social psychologists. Many of the questions posed in surveys were motivated by a desire to measure subjective constructs thought by attitudinal researchers to be of intrinsic interest; for example, aspirations, intentions, status, happiness, and so on. When collection of subjective data was motivated by a desire to study behavior, the idea usually was that such data might have predictive power as covariates that "explain" behavior.

For those many years, economists and others who use surveys as the basis for formal empirical analysis of decision making rarely made use of the available subjective data. In part, this reflected a prevailing general hostility of economists towards subjective data. In part, it reflected the fact that the subjective constructs measured by attitudinal researchers do not map well into those that form the basis for decision analysis, namely expectations and preferences.

In the past decade, economists have lessened their general wariness of subjective data and have increasingly given thought to how survey measures of expectations and preferences may prove useful in decision analysis. The Health and Retirement Study (HRS), the National Longitudinal Survey of Youth 1997 (NLSY97), the Survey of Economic Expectations (SEE), and several European surveys have provided important vehicles for exploration of various forms of questions. Analyses of the data collected in these surveys have by now yielded many interesting empirical findings. As a result, there is today considerable interest among economists in the collection and analysis of survey data on expectations and preferences.

Objectives of the Conference

It is now time to:

• assess what we have learned from the data on expectations and preferences collected to date in the HRS, NLYS97, SEE, and other household surveys.
• plan ahead so that future data collection will prove most useful to empirical analysis of decision making.
• bring together the economists who have been engaged in the collection and analysis of expectations and preference data in different surveys, so that they may better learn from one another's experiences.
• encourage greater contact between these economists and other researchers, especially psychologists specializing in judgment and decision, who share a common interest in the collection of data on expectations and preferences.

Papers presented at this conference are listed below; all are available online in PDF format.

Friday November 2: Elicitation of Expectations

• Sean Nicholson and Nicholas S. Souleles,Physician income expectations, income realizations, and specialty choice
• Marcel Das and Arthur van Soest, Expected versus realized income changes: A test of the rational expectations hypothesis
• Luigi Guiso, Tullio Jappelli, and Luigi Pistaferri, An empirical analysis of earnings and employment risk
• Jeff Dominitz and Charles Manski,Social security expectations and retirement savings decisions
• Gabor Kezdi and Robert Willis,Subjective probability distributions and the decision to save
• Andrew Parker and Baruch Fischhoff, Construct validity of teens' probabilistic expectations: Dying and other significant life events
• Peter Ubel, George Loewenstein, and Christopher Jepson, Do people underestimate the quality of life of disabilities because of a focusing illusion or because of failure to consider adaptation?
• Jon Krosnick, Americans' Perceptions of the Health Risks of Cigarette Smoking: A New Opportunity for Public Education

Saturday November 3: Elicitation of Preferences, and other topics

• Arie Kapteyn and Federica Teppa, Subjective measures of risk aversion and portfolio choice
• Luigi Guiso and Monica Paiella, Risk aversion, wealth, and background risk
• George Loewenstein and Roberto Weber, Multidimensional time discounting
• Miles Kimball and Matthew Shapiro, Are the income and substitution effects both large or both small?
• Mike Hurd and James Smith, Trends in the size and distribution of bequests
• Daniel McFadden and Joachim Winter, Experimental analysis of survey response bias over the internet: some results from the retirement perspectives survey
• Nicholas Souleles, Consumer sentiment: Its rationality and usefulness in forecasting expenditure - evidence from the Michigan Micro Data