Revisiting the evidence for cardinal treatment of ordinal variables

B-Tier
Journal: European Economic Review
Year: 2017
Volume: 92
Issue: C
Pages: 337-358

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Well-being (life satisfaction or happiness) is a latent variable that is impossible to observe directly. Moreover, it does not have a unit of measurement. Hence, survey questionnaires usually ask people to rate their well-being in different domains. The common practice of comparing well-being by means of averages or linear regressions ignores the fact that well-being is an ordinal variable. Since data is ordinal, monotonic increasing transformations are permissible. We illustrate the sensitivity of empirical studies to monotonic transformations using examples that relate to well-known empirical papers, and provide two theoretical conditions that enable us to rank ordinal variables. In our examples, monotonic increasing transformations can in fact reverse the conclusion reached.

Technical Details

RePEc Handle
repec:eee:eecrev:v:92:y:2017:i:c:p:337-358
Journal Field
General
Author Count
2
Added to Database
2026-01-29