The Effects of Bracketing in Wealth Estimation

The use of bracketing in wealth surveys is sometimes criticized on the grounds that it will encourage respondents to substitute rough guesses for careful thought. In such a manner, the use of bracketing will "crowd out" more specific answers, creating the illusion of a reduction in non-response. This paper examines the patterns of wealth response in the first two waves of the Health and Retirement Study. On average, people do not appear to transition to bracketing. New tests of the breakeven level of crowding-out are suggested. Based on the explanatory power of the brackets, the degree of crowding-out, which would be necessary to make the use of bracketing counterproductive, appears to be much higher than plausible