The Impact of Adaptive Preferences on Subjective Indicators: An Analysis of Poverty Indicators

Abstract

Subjective indicators are often criticized since they are thought to be particularly affected by the phenomenon of adaptive preferences and social comparison. For social policy purposes, processes of downward adaptation in disadvantaged individuals are of particular importance, i.e., it is supposed that such people compare themselves with others who are in the same precarious situation or even worse off and, as a result, lower their expectations and adapt their aspirations and preferences to their material and financial constraints. Based on the 2006-2010 waves of the Swiss Household Panel study, this contribution examines whether, and to what degree, indicators of material deprivation, subjective poverty and subjective well-being are affected by such downward adaptations. Our empirical analysis demonstrates that the bias caused by adaptation processes varies considerably among different measures and that, although subjective indicators are indeed often affected by this phenomenon, there are also robust measures, notably Townsend's deprivation measure, Halleröd's proportional deprivation index and the subjective wellbeing measure of general life satisfaction.

Subjective Perception and Causal Attributions for Poverty in Italy

“…Firstly, the subjectivity makes difficult the interpretation and comparison of outcomes between different contexts. The differences in the perception of living conditions, the mix of emotional aspects, personal aspirations and expectations (Crettaz and Suter, 2013), represent some problematic issues that this approach faces. Furthermore, a great degree of variability in answers given by the same respondent if asked in different times often occurs (Kristensen and Westergaard-Nielsen, 2007;Krueger and Schkade, 2008) or individuals may not want to acknowledge their socio-economic status (Santarelli, 2013).…”

Consistent Poverty across the EU

“…The inclusion of the latter is supported by findings from the literature with respect to the subjective character of the material deprivation indicator (e.g. Crettaz andSutter 2013, McKnight 2013). This subjective measure can therefore serve as a potential control for country-specific heterogeneity in terms of perceptions (cultural differences).…”

Incorporating Public Insecurity Indicators: A New Approach to Measuring Social Welfare in Mexico

“…These observations point to need for more-refined theories of security/insecurity and welfare for middle and low income locations. happiness, and satisfaction with life, these findings may suggest that subjective indicators are at times affected by the problem of adaptive preferences (Crettaz & Suter, 2013).…”