The Effects of Bracketing in Wealth Estimation

15 Pages Posted: 4 Nov 2003

See all articles by Harish Chand

Harish Chand

Microsoft Corporation

Li Gan

Texas A&M University - Department of Economics; National Bureau of Economic Research (NBER)

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Abstract

The use of bracketing in wealth surveys is sometimes criticized on the grounds that it will encourage respondents to substitute rough guesses for careful thought. In such a manner, the use of bracketing will "crowd out" more specific answers, creating the illusion of a reduction in non-response. This paper examines the patterns of wealth response in the first two waves of the Health and Retirement Study. On average, people do not appear to transition to bracketing. New tests of the breakeven level of crowding-out are suggested. Based on the explanatory power of the brackets, the degree of crowding-out, which would be necessary to make the use of bracketing counterproductive, appears to be much higher than plausible.

Suggested Citation

Chand, Harish and Gan, Li, The Effects of Bracketing in Wealth Estimation. Review of Income and Wealth, Vol. 49, pp. 273-287, June 2003. Available at SSRN: https://ssrn.com/abstract=416205

Harish Chand (Contact Author)

Microsoft Corporation ( email )

One Microsoft Way
Redmond, WA 98052

Li Gan

Texas A&M University - Department of Economics ( email )

5201 University Blvd.
College Station, TX 77843-4228
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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