Arbeitspapier

Revisiting the evidence for a cardinal treatment of ordinal variables

Well-being (i.e., satisfaction, happiness) is a latent variable, impossible to observe directly. Hence, questionnaires ask people to grade their well-being in different life domains. The most common practice-comparing well-being by means of descriptive analysis or linear regressions-ignores that the underlying collected well-being information is ordinal. If the well-being function is ordinal, then monotonic transformations are allowed. We demonstrate that treating ordinal data by methods intended to be used for cardinal data may give an incorrect impression of a robust result. Particularly, we derive the conditions under which the use of cardinal method to an ordinal variable gives an illusionary sense of robustness, while in fact one can reverse the conclusion reached by using an alternative cardinal assumption. The paper provides empirical applications.

Sprache
Englisch

Erschienen in
Series: SOEPpapers on Multidisciplinary Panel Data Research ; No. 772

Klassifikation
Wirtschaft
Methodological Issues: General
Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
Welfare, Well-Being, and Poverty: General
General Welfare; Well-Being
Welfare, Well-Being, and Poverty: Other
Thema
satisfaction
well-being
ordinal
cardinal
dominance

Ereignis
Geistige Schöpfung
(wer)
Schröder, Carsten
Yitzhaki, Shlomo
Ereignis
Veröffentlichung
(wer)
Deutsches Institut für Wirtschaftsforschung (DIW)
(wo)
Berlin
(wann)
2015

Handle
Letzte Aktualisierung
20.09.2024, 08:24 MESZ

Datenpartner

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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Schröder, Carsten
  • Yitzhaki, Shlomo
  • Deutsches Institut für Wirtschaftsforschung (DIW)

Entstanden

  • 2015

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