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Subjective health measures and state dependent reporting errors

M Kerkhofs1, M Lindeboom

  • 1Department of Economics, Leiden University, The Netherlands.

Health Economics
|May 1, 1995
PubMed
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Subjective health measures in retirement models are biased by financial incentives. This study models state-dependent reporting errors, finding significant bias among Disability Allowance recipients, impacting labor supply conclusions.

Area of Science:

  • Economics
  • Public Policy
  • Health Economics

Background:

  • Subjective health measures are widely used in labor supply and retirement research.
  • Concerns exist regarding potential biases in self-reported health due to financial incentives and social desirability.
  • Disability Insurance benefits eligibility is contingent on poor health, creating incentives for biased reporting.

Purpose of the Study:

  • To assess the significance of state-dependent reporting errors in survey responses on health.
  • To propose and estimate a model that accounts for systematic misreporting of health status.
  • To evaluate the impact of biased health reporting on labor supply and retirement models.

Main Methods:

  • Development of a statistical model to identify and quantify state-dependent reporting errors.

Related Experiment Videos

  • Estimation of the model using survey data on labor market status and self-reported health.
  • Analysis of reporting errors specifically for individuals receiving Disability Allowance.

    • Main Results:

    • Reporting errors in subjective health measures are substantial and systematic among Disability Allowance recipients.
    • Self-reported health variables are endogenous in labor supply and retirement models for this group.
    • The magnitude of reporting errors varies based on the respondent's labor market status.

    Conclusions:

    • Ignoring state-dependent reporting errors can lead to serious biases in parameter estimates of retirement models.
    • Conclusions drawn from empirical models using subjective health measures may be unreliable without accounting for these biases.
    • The proposed model offers a method to correct for systematic misreporting, improving the accuracy of economic models.