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Living Standards Measurement Study

Subjective Welfare

In recent years there has been increasing recognition that poverty is a multifaceted and multidimensional problem, and that traditional one-dimensional measures, such as per-capita consumption, do not sufficiently capture the complexity of the subject. In response, subjective welfare measures have been increasingly employed to provide additional measures of well-being. This component of the research program has two aims. First, it will review past questions and the experience with those questions from the literature on subjective welfare in both developed and developing countries. Based on these findings, it will propose a preliminary core set of subjective welfare questions. Second, the project will aim to make a significant advance in our knowledge about how best to collect such questions in developing countries and how best to validate and adjust the data for inherent comparability problems.

Anchoring Vignettes

One-dimensional measures of poverty, such as per-capita consumption or income, do not sufficiently capture the complexity and multidimensionality of poverty. Subjective welfare measures, in which respondents self-report their household’s welfare level, offer alternative measure of living standards. This component of the research program focuses on improving subjective measures of well-being. The project aims to improve these measures, including how to validate and adjust the data for inherent comparability problems.

While subjective questions have been widely used in fields such as psychology and sociology for many years, some question their applicability to the measurement of well-being. The main critique of their validity is that unobservable characteristics of survey respondents may influence the scales people use to assess if they are poor or rich. Anchoring vignettes may potentially correct for the resulting bias in subjective reports of welfare. This approach has been adapted from Harvard University political scientist Gary King and co-authors; in their work, these vignettes are applied to self-reports of health status and political efficacy. Here we extend this to subjective welfare reports. Anchoring vignettes provide common points of comparability across heterogeneous groups, and can be used to rescale subjective questions and reduce bias from unobservable characteristics. To date, in this LSMS research program, anchoring vignette have been piloted and fielded in household surveys in Tanzania, Tajikistan and Guatemala. The English text of these vignettes is available here.


  • Anchoring vignettes in Tanzania

    We piloted and fielded anchoring vignette and subjective welfare questions in the Kagera Subjective Welfare Survey, a household survey conducted in November-December 2007 in the Ngara district of Tanzania. As the first set of vignette we developed, significant time was devoted in June 2007 with respect to the topics and text of the vignettes. The vignettes of the vignettes was developed in consultation with local consultants. Topics were chosen to measure locally relevant information, such as food security, quality of medical care, quality of education, and poverty. The total sample size was 450 households. Data was collected using Ultra Mobile Personal Computers.

  • Anchoring vignettes in Tajikistan

    The anchoring vignette and subjective welfare questions were piloted and included in the 2007 Tajikistan Living Standards Survey (TLSS) (in Section 14), conducted between September and October 2007. As in the case of the Tanzania survey, the specific topics were relevant to the context, with questions on migration and poverty. The total sample size of the TLSS was 4,860 households.

    Analysis of the Tajik vignettes has been used to describe the role of individual unobservable characteristics in assessing self-reported subjective beliefs. The findings indicate that, while respondents hold diverse scales in assessing their welfare, there is little bias in either the economic gradient of subjective welfare or most of other coefficients on covariates of interest.

    The text of the working paper "Frame of Reference Bias in Subjective Welfare Regressions" is available for downloading.

  • Anchoring Anchoring vignettes in Guatemala

    Anchoring vignettes were developed and included as part of the Estudio Sobre el Impacto de las Remesas y Migraciones en la san a Nivel Famliar y Comunitario (Study of the Impact of Migration and Remittances at the Household and Community Levels) in the San Gaspar Ixchil, Cuilco, Santa Ana Huista and Jacaltenango municipalities in Guatemala. The vignettes were developed in February 2008 and focused on the relevant issues of dependence on remittances and overall poverty. The total sample size of this survey was 1,220 households and the field work completed between April and July 2008.