How to avoid missing the target! Responding to response error bias...

Overestimation of Income

The average American reported their household income at $53,000 per year.

The US census reported the median household income at $44,389 per year and that 58% of households make less than $50,000 per year.

HOW IS THIS POSSIBLE???

It is not...

What one of these can you do about it?

Grow a money tree and start handing out cash to make the survey results more accurate. Bribe the census to change their responses to make your survey results match theirs.Adjust your data to compensate for the bias.

The correct answer was NOT to bribe the census,

sorry.

To adjust your data, simply deduct $10,000 from household income, by which the average person overestimates this figure.

Think you’ve almost got it? Let’s try another.

The average American reports spending 5% of household income on

entertainment.

Reports from cities themselves showed an

average of actual spending of 5.83% of income.

What does this mean to you???

This means....83% is too small of a number to matter anyway..83% is greater than .1 and professor Geurts said something about .1 with statistical significance, so this number... and something about not being significant so you are going to choose not to use it.You understand that .83% times everyone in the United States’ income adds up to a whole lot of money and you would like to capitalize on that.

Here’s what you’re going to do about it...

Take that money!

Just add .83% of income to the entertainment budget of what the person taking the survey claims to have.

People claim they are willing to spend .83% less of their income on entertainment than they actually are-on average. As an analyst, you have to add that back.

Let’s try one more

Average Credit Card Debt

The average CC debt of low and middle income households in America is $8,650. http://www.responsiblelending.org/press/releases/page.jsp?itemID=28011726

According to the census the same category’s debt is $9,937.

http://72.14.253.104/u/census?q=cache:szajpMaIgY4J:www.census.gov/dusd/MAB/wp233.pdf+Average+credit+card+debt+site:census.gov&hl=en&gl=us&ct=clnk&cd=7&ie=UTF-8

This is an underestimation of about 13% of their actual debt.

The debt does vary depending on income so for more info you can go to the links

How do you do this

yourself?Step 1: Research response data and decipher an average for reported figures.

Step 2: Research a reliable source for accurate data (we selected the Census Bureau)

Step 3: Contrast the figures on the data you retrieved from your research and determine the difference between the two.

Step 4: Take the final figure you have reached as your difference and either add or subtract it back to the surveyed data to make the data match the actual data. This will serve as your check step.

Step 5: Use step four in future surveys to counter response bias.

Just Like Magic!

Sources

44389www.census.gov/Press-Release/www/releases/archives/income_wealth/005647.html - 30k

http://www.billsaver.com/household.html

http://www.gvu.gatech.edu/user_surveys/survey-1997-10/graphs/general/Household_Income.html

Project prepared by: Kristi Contreras, Lindsey Nehring, and Mike Rose. Fall Semester 2006, Brigham Young University. All rights reserved.