Stefanie Schurer - Survey item-response behavior as a proxy for unobserved ability: Theory and application

Melbourne Institute Seminar Series

Melbourne Institute Seminar Room
Room 6.05, FBE Building
111 Barry St, Carlton

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Title: Survey item-response behavior as a proxy for unobserved ability: Theory and application

Abstract: We develop and test an economic model of the cognitive and non-cognitive foundations of survey item-response behavior. We show that a summary measure of response behaviour - the survey item-response rate (SIRR) - varies with cognitive and less so with non-cognitive abilities, has a strong individual fixed component and is predictive of economic outcomes. We demonstrate the usefulness of SIRR as a proxy for cognitive ability to reduce omitted-variable biases in estimated wage returns. We derive both necessary and sufficient conditions under which the use of a proxy-variable approach reduces omitted-variable biases, providing a guideline for researchers who use the approach in other settings.

Presenter: Stefanie Schurer, University of Sydney