How Reliable and Consistent are Subjective Measures of Welfare in Europe and Central Asia? Evidence from the Second Life in Transition Survey

This paper analyzes the reliability and consistency of subjective well-being measures. Using the Life in Transition Survey, which was administered in 34 countries of Europe and Central Asia in 2006 and 2010, the paper evaluates subjective well-bein...

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Bibliographic Details
Main Authors:	Cojocaru, Alexandru, Diagne, Mame Fatou
Format:	Policy Research Working Paper
Language:	English
Published:	2013
Subjects:	AFFILIATED ORGANIZATIONS ASSET OWNERSHIP ASSETS BANK ACCOUNT BIASES CONSUMPTION EXPENDITURES COUNTRY DUMMIES COUNTRY LEVEL CREDIT CARD CROSS-COUNTRY DIFFERENCES DEBIT CARD DEMOGRAPHIC CHARACTERISTICS DEMOGRAPHIC COMPOSITION DESCRIPTIVE STATISTICS DEVELOPED COUNTRIES DEVELOPMENT POLICY DURABLE GOODS EARNINGS ECONOMETRICS ECONOMIC CRISIS ECONOMIC DEVELOPMENT ECONOMIC PERFORMANCE ECONOMIC REVIEW EMPLOYMENT INCOME EMPLOYMENT STATUS ENROLLMENTS EXCHANGE RATES EXCLUSION EXPENDITURE EXPENDITURES FINANCES FINANCIAL CRISES FINANCIAL CRISIS FOOD EXPENDITURES GDP GDP PER CAPITA GENDER GROSS DOMESTIC PRODUCT HEALTH INSURANCE HIGH CORRELATION HOUSEHOLD ACCESS HOUSEHOLD COMPOSITION HOUSEHOLD CONSUMPTION HOUSEHOLD CONSUMPTION PER CAPITA HOUSEHOLD FINANCES HOUSEHOLD MEMBERS HOUSEHOLD SIZE HOUSEHOLD WELFARE HOUSEHOLDS INCOME INCOME DISTRIBUTION INCOME SHOCK INCOME SOURCE INCOMES INEQUALITY INEQUALITY ESTIMATES INEQUALITY MEASUREMENT INEQUALITY MEASURES INTERNATIONAL BANK LABOR MARKET LIVING STANDARDS MEAN CONSUMPTION MEASUREMENT ERROR MISREPORTING NEGATIVE EFFECT PEOPLES POLICY ANALYSIS POLICY DISCUSSIONS POLICY MAKING POLICY RESEARCH POOR POVERTY LINES POVERTY REDUCTION PRIMARY EDUCATION PRIVATE SECTOR PUBLIC POLICY RELATIVE INCOME RELATIVE INCOME DISTRIBUTION RELATIVE POSITION REMITTANCES RURAL RURAL AREAS SELF-EMPLOYMENT SIGNIFICANT EFFECT SOCIAL ASSISTANCE SOCIAL PROGRESS STATEMENT TRANSITION ECONOMIES TUITION UNEMPLOYMENT UNION WAGES WEALTH Microdata Set
Online Access:	http://documents.worldbank.org/curated/en/2013/02/17287547/reliable-consistent-subjective-measures-welfare-europe-central-asia-evidence-second-life-transition-survey http://hdl.handle.net/10986/13150

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Summary:	This paper analyzes the reliability and consistency of subjective well-being measures. Using the Life in Transition Survey, which was administered in 34 countries of Europe and Central Asia in 2006 and 2010, the paper evaluates subjective well-being measures (satisfaction with life and subjective relative income position) against objective measures of welfare based on consumption and assets. It uses the different formulations of life satisfaction in the survey to test robustness to alternative framing and scaling. It also explores within-household differences in subjective well-being assessments. The analysis finds that subjective relative income is weakly correlated with household relative welfare position as measured by consumption or assets. Life satisfaction, by contrast, is highly correlated with objective and subjective measures of household welfare. It generally reflects cross-country differences in average consumption, assets, or per capita gross domestic product, although Central Asian countries report much higher life satisfaction levels than their incomes would suggest. Two alternative measures of life satisfaction are highly correlated and the correspondence between verbal and numeric scales is strong within a country or groupings of similar countries. Within households, subjective assessments of relative income are roughly consistent but measurement error is correlated with individual characteristics (gender and age of respondents), which could cause systematic biases in the analysis.

How Reliable and Consistent are Subjective Measures of Welfare in Europe and Central Asia? Evidence from the Second Life in Transition Survey

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