Knowledge and Preference in Reporting Financial Information

23 Pages Posted: 17 Feb 2008

See all articles by Honggao Cao

Honggao Cao

University of Michigan at Ann Arbor

Daniel Hill

University of Michigan at Ann Arbor

Date Written: April 2005

Abstract

This article models respondent behavior in a financial survey with a framework explicitly integrating a respondent's knowledge of and willingness to reveal his or her financial status. Whether a respondent provides a valid answer, a "don't know", or a "refusal" to a financial question depends on the interaction of his or her financial knowledge and preferences regarding revealing the knowledge. Using asset response and nonresponse data from the Health and Retirement Study (2000), we found that knowledge and preferences play interrelated roles in reporting financial information, that a respondent's age, gender, education, and race and ethnicity are important predictors of respondent behavior, and that race and ethnicity affect a respondent behavior only via their influence on preferences, while gender only via its influence on knowledge. We also found strong heterogeneity in respondents' financial knowledge and their willingness to reveal the knowledge.

Suggested Citation

Cao, Honggao and Hill, Daniel, Knowledge and Preference in Reporting Financial Information (April 2005). Michigan Retirement Research Center Research Paper No. WP 2005-100, Available at SSRN: https://ssrn.com/abstract=1093770 or http://dx.doi.org/10.2139/ssrn.1093770

Honggao Cao (Contact Author)

University of Michigan at Ann Arbor ( email )

500 S. State Street

Daniel Hill

University of Michigan at Ann Arbor ( email )

500 S. State Street

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