Scale of reference bias and the evolution of health
The analysis of subjective measures of well-being-such as self-reports by individuals about their health status is frequently hampered by the problem of scale of reference bias. A particular form of scale of reference bias is age norming. In this study we corrected for scale of reference bias by allowing for individual specific effects in an equation on subjective health. A random effects ordered response model was used to analyze scale of reference bias in self-reported health measures. The results indicate that if we do not control for unobservable individual specific effects, the response to a subjective health state measure suffers from age norming. Age norming can be controlled for by a random effects estimation technique using longitudinal data. Further, estimates are presented on the rate of depreciation of health. Finally, simulations of life expectancy indicate that the estimated model provides a reasonably good fit of the true life expectancy.
KeywordsSubjective health Scale of reference bias
The data of the British Household Panel were made available through the ESRC Data Archive. The data were originally collected by the ESRC Research Centre on Microsocial Change at the University of Essex. Neither the original collectors of the data nor the Archive bear any responsibility for the analyses or interpretation presented here. We thank three anonymous referees for their comments on a previous version of this contribution.
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