Chapter 3. Subjective Health Measures and State-Dependent Reporting Errors

  1. Andrew M. Jones3 and
  2. Owen O'Donnell4
  1. Marcel Kerkhofs1 and
  2. Maarten Lindeboom2

Published Online: 10 JUL 2002

DOI: 10.1002/0470846313.ch3

Econometric Analysis of Health Data

Econometric Analysis of Health Data

How to Cite

Kerkhofs, M. and Lindeboom, M. (2002) Subjective Health Measures and State-Dependent Reporting Errors, in Econometric Analysis of Health Data (eds A. M. Jones and O. O'Donnell), John Wiley & Sons, Ltd, Chichester, UK. doi: 10.1002/0470846313.ch3

Editor Information

  1. 3

    Department of Economics and Related Studies, University of York, UK

  2. 4

    Department of Balkan, Slavic and Oriental Studies, University of Macedonia, Thessaloniki, Greece

Author Information

  1. 1

    Organisation of Labour Market Research, Tilburg University, PO Box 90153 5000 LE Tilberg, The Netherlands

  2. 2

    Department of Economics, Vrije Universiteit, De Boelelaan 1105 1081 HV Amsterdam, The Netherlands

Publication History

  1. Published Online: 10 JUL 2002
  2. Published Print: 30 APR 2002

ISBN Information

Print ISBN: 9780470841457

Online ISBN: 9780470846315



  • health reporting;
  • state dependence;
  • labour supply;
  • retirement


The use of subjective health measures in empirical models of labour supply and retirement decisions has frequently been criticized. Responses to questions concerning health may be biased due to financial incentives and the willingness to conform to social rules. The eligibility conditions for some social security allowances, notably Disability Insurance benefits, are contingent upon bad health. Even if the decision to apply for a disability allowance is to some extent motivated by financial considerations or a relatively strong preference for leisure, respondents will be inclined to play down these motives and emphasize the importance of their health condition. As a consequence, reporting errors may depend on the labour market status of the respondent and self-reported health variables will be endogenous in labour supply and retirement models. The objective of this paper is to assess the importance of state dependent reporting errors in survey responses and to propose and estimate a model that can be used to account for this kind of systematic mis-reporting. The estimation results indicate that among respondents receiving Disability Allowance, reporting errors are large and systematic. Using such subjective health measures in retirement models may therefore seriously bias the parameter estimates and the conclusions drawn from these.