Abstract
This chapter provides an overview of the psychological biases behind the striking gaps between perception and reality in four social domains—health, employment, the perception of security, and social ranking. Biases associated with cultural values are very relevant with respect to health and job satisfaction. Affect and availability heuristics are the dominant sources of bias in perceptions of security. The formation of subjective social rankings appears to be less culturally dependent and more dependent on the level of socioeconomic development of each country. Understanding the gaps between objective and subjective indicators may help clarify public debate on social policy.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
Furthermore, some “objective measures” may also be subjective inasmuch as they are constructs based on the subjective criteria of experts.
- 2.
All of the perception data mentioned in this paragraph come from the Gallup World Poll of 2006 for Latin America. Further details are presented in the relevant sections below.
- 3.
See the exact wording of this question below.
- 4.
Since culture—as well as personality—refers to those factors that construct what individuals are and how they see themselves and the world around them, perception is necessarily shaped by those factors.
- 5.
And, as such, may be said to be “subjective” or “culturally biased”.
- 6.
- 7.
- 8.
Sommerfeld et al. (2002) and Salomon et al. (2004). Jürges (2007) has found that an important part of cross-country differences in self-reported health in ten European countries can be attributed to differences in response styles, possibly reflecting differences in beliefs, values, and expectations. Lindeboom and van Doorslaer (2004) and van Doorslaer and Gerdtham (2003) have found evidence of reporting differences across age-sex groups but not across socioeconomic groups in Sweden and Canada, while Milcent and Etile (2006) provide evidence of reporting differences by income but only in the middle categories of self-rated health. Groot (2000) analyzes the impact of age biases in the United States and finds that the scale of reference of a subjective health measure changes with age.
- 9.
Health perceptions of the general populations of Latin American countries have been the subject of very few studies. Suárez-Berenguela (2000) calculated socioeconomic gradients of health-assessed health status in Brazil, Jamaica, and Mexico and of self-reported symptoms of illness or accident in those same countries, plus Ecuador and Peru. He found normal gradients, although they were substantially less steep than the objective indicators of morbidity or mortality. Dachs et al. (2002) studied inequalities in self-reported health problems in 11 Latin American countries. They found that inequalities (by quintiles) were small, which they attributed to cultural and social differences across socioeconomic groups in the perception of health.
- 10.
The two measures are, respectively, total factor productivity computed as a residual from a Cobb-Douglas production function with capital and education-augmented labor, and a measure of labor productivity where labor is augmented by education. These productivity calculations come from Daude and Fernández-Arias (2010).
- 11.
The correlation is −0.004 for the 18 Latin American countries with data on self-employment and employment in firms of less than ten workers in 2007 (or closest year) computed by SEDLAC from official household survey data.
- 12.
Warr (2003) provides an excellent summary of this literature.
- 13.
While in the standard ordered probit model, Denmark and Finland are ranked at the top of the seven countries, when vignettes are used as anchors to re-scale the model, Scandinavian countries are ranked lower and the Netherlands is found to have the highest level of job satisfaction.
- 14.
Essentially, the perception of insecurity is stronger among women and older people, presumably because they are more vulnerable, in spite of the fact that these groups are less prone to be crime victims. Individuals with more education and higher incomes are found in some studies for developed countries (but not for Latin America) to be less fearful of crime.
- 15.
To test the importance of proximal cues, Lee et al. (2010), at the peak of the flu pandemic fear of 2009, arranged for participants in a field experiment to encounter a sneezing person before answering a set of questions about different types of risk. Those exposed to the cue considered that the risk of an “average American” to die before the age of 50 from a crime or accident was 41.2 %, while those not exposed to the cue estimated that risk at 27.9 %.
- 16.
- 17.
O’Connell and Whelan (1996) found that the perception of crime prevalence in Ireland is independent of personal experience of victimization. However, the small sample of this study (623) casts some doubt on the conclusion, given the relatively low frequency of crime events in the sample.
- 18.
However, in one of three samples used in the study (covering the metropolitan area of Mexico City, January 2011), only indirect victimization was found to be associated with high significance with feelings of insecurity.
- 19.
For an exhaustive discussion of the theoretical and empirical literature see Farral et al. (2009).
- 20.
This is also the case outside Latin America. For instance, only 6 % of all individuals ranked in the richest third of South Africans in terms of actual per capita household income perceive that they are among the richest third.
- 21.
Measured with a summary index of the five health conditions assessed through the EQ-5D instrument described in the health section above.
- 22.
Admittedly, however, some people may derive pecuniary benefits from their relation with others or their participation in social or religious organizations.
- 23.
These computations make use of the fact that, since income affects subjective social ranking, the effect of any other variable on social ranking can be expressed in terms of income. The actual calculations presented in this paragraph are based on the coefficient estimates in Lora and Fajardo (2013, Table 5) for a hypothetical 30 year-old woman who lives in Brazil, has one child, a high education level, is employed, has friends and religious beliefs, and lives in a house with access to all public services.
- 24.
As pointed out by a commentator, it may also be due to a social desirability bias, as interviewees may feel ashamed to declare themselves relatively well-off or rich. The same commentator suggested an alternative explanation: by placing themselves subjectively in the middle rungs, individuals mitigate the disutility associated with inequality, which results from feeling envious of those who are richer and from feeling regret for having more than those who are poorer, as argued by Fehr and Schmidt (1999). These hypotheses have not been tested in this context.
Bibliography
Akerlof, G., & Kranton, R. (2000). Economics and identity. Quarterly Journal of Economics, 115(3), 715–753.
Akerlof, G., & Kranton, R. (2005). Identity and the economics of organizations. Journal of Economic Perspectives, 19(1), 9–32.
Akerlof, G., & Kranton, R. (2010). Identity economics: How our identities shape our work, wages and well-being. Princeton: Princeton University Press.
Alesina, A., & La Ferrara, E. (2005). Preferences for redistribution in the land of opportunities. Journal of Public Economics, 89(5–6), 897–931.
Alicke, D. (1985). Global self-evaluation as determined by the desirability and controllability of trait adjectives. Journal of Personality and Social Psychology, 49(6), 1621–1630.
Ardanaz, M., Corbacho, A., Ibarrarán, P., & Ruiz-Vega, M. (2013). Mind the gap: Bridging perception and reality with crime information. Unpublished research report. Washington, DC: Inter-American Development Bank.
Aronson, E., & Mills, J. (1959). The effect of severity of initiation on liking for a group. Journal of Abnormal and Social Psychology, 59, 177–181.
Asadullah, M., & Fernandez, R. (2008). Work-life balance practices and the gender gap in job satisfaction in the UK: Evidence from matched employed-employee data (IZA Discussion Paper 3582). Bonn: Institute for the Study of Labor (IZA).
Blanchflower, D., & Oswald, A. (1999). Well-being, insecurity and the decline of American job satisfaction. Coventry/Hanover: University of Warwick/Dartmouth College. Mimeographed document.
Botero, J., et al. (2004). The regulation of labor. Quarterly Journal of Economics, 119(4), 1339–1382.
Buckingham, M., & Coffman, C. (1999). First, break all the rules: What the world’s greatest managers do differently. New York: Simon & Schuster.
Chan, D. (2009). The urban legend of self-report data and its historical roots. In C. E. Lance & R. J. Vandenberg (Eds.), Statistical and methodological myths and urban legends: Doctrine, verity and fable in the organizational and social sciences. New York: Routledge.
Chaparro, J., & Lora, E. (2013). The relation between human resource management practices, job satisfaction, and labor productivity: Evidence from cross-country and individual-level data. Unpublished research report.
Clark, A. (2001). What really matters in a Job? Hedonic measurement using quit data. Labour Economics, 8(2), 223–242.
Clark, A., & Senik, C. (2006). The (unexpected) structure of ‘Rents’ in the French and British labor markets. Journal of Socio-Economics, 35(2), 180–196.
Corbacho, A., Philipp, J., & Ruiz-Veja, M. (2012). Crime and erosion of trust. Evidence for Latin America (IDB Working Paper 344). Washington, DC: Inter-American Development Bank.
Cruces, G., Perez, R., & Tetaz, M. (2013). Biased perceptions of income distribution and preferences for redistribution: Evidence from a survey experiment. Journal of Public Economics, 98, 100–112.
Dachs, J., et al. (2002). Inequalities in health in Latin America and the Caribbean: Descriptive and exploratory results for self-reported health care in twelve countries. Pan American Journal of Public Health, 11(5–6), 335–355.
Daude, C., & Fernández-Arias, E. (2010). On the role of productivity and factor accumulation in economic development in Latin America (IDB Working Paper 155). Washington, DC: Inter-American Development Bank.
Deaton, A. (2010). Income, aging, health and well-being around the world: Evidence from the Gallup world poll. In D. A. Wise (Ed.), Research findings in the economics of aging. Chicago: The University of Chicago Press.
Di Tella, R., & Ñopo, H. (2008). Happiness and beliefs in criminal environments (IDB Working Paper 554). Washington, DC: Inter-American Development Bank. Available at SSRN: http://ssrn.com/abstract=1821905 or http://dx.doi.org/10.2139/ssrn.1821905
Farrall, D., Jackson, J., & Gray, E. (2009). Social order and the fear of crime in contemporary times. Clarendon studies in criminology. New York: Oxford University Press.
Fehr, E., & Schmidt, K. (1999). A theory of fairness, competition and cooperation. The Quarterly Journal of Economics, 114(3), 817–868.
Festinger, L. (1957). A theory of cognitive dissonance. Palo Alto: Stanford University Press.
Frank, H. (1985). The demand for unobservable and other nonpositional goods. The American Economic Review, 75(1), 101–116.
Frey, B. (2008). Happiness: A revolution in economics. Cambridge: The MIT Press.
Gaviria, A. (2007). Social mobility and preferences for redistribution in Latin America. Economia, 8(1), 55–96.
Gaviria, A., & Pagés, C. (2002). Patterns of crime victimization in Latin American cities. Journal of Development Economics, 67(1), 181–203.
Gerard, H., & Mathewson, G. (1966). The effects of severity of initiation on liking for a group: A replication. Journal of Experimental Social Psychology, 2, 278–287.
Graham, C., Higuera, L., & Lora, E. (2011). Which health conditions cause the most unhappiness? Health Economics, 20(12), 1431–1447.
Groot, W. (2000). Adaptation and scale of reference bias in self-assessment of quality of life. Journal of Health Economics, 19(3), 403–420.
Guenther, L., & Alicke, D. (2010). Deconstructing the better-than-average effect. Journal of Personality and Social Psychology, 99, 755–770.
Guillaud, E. (2011). Preferences for redistribution: An empirical analysis over 33 countries. Journal of Economic Inequality, 11(1), 57–78. doi:10.1007/s10888-011-9205-0.
Harmon-Jones, E., & Mills, J. (1999). Cognitive dissonance: Progress on a pivotal theory in social psychology. Washington, DC: American Psychological Association.
Harter, J., Schmidt, F., & Keyes, C. (2002). Well-being in the workplace and its relationship to business outcomes: A review of the Gallup studies. In C. Keyes & J. Haidt (Eds.), First edition. Flourishing: Positive psychology and the life well-lived. Washington, DC: American Psychological Association.
Inter-American Development Bank (IDB). (2008). Beyond facts: Understanding quality of life. Development in the Americas. David Rockefeller Center for Latin American Studies.
Jürges, H. (2007). True health vs. response styles: Exploring cross-country differences in self-reported health. Health Economics, 16(2), 163–178.
Kahneman, D. (2011). Thinking, fast and slow. New York: Farrar, Straus, and Giroux.
Kahneman, D., & Tversky, A. (1986). Choices, values and frames. In N. J. Smelser & D. R. Gerstein (Eds.), Behavioral and social science: 50 years of discover (Committee on basic research in the behavioral and social sciences). Washington, DC: National Research Council.
Kahneman, D., Knetsch, J., & Thaler, H. (1990). Experimental tests of the endowment effect and the coase theorem. Journal of Political Economy, 98(6), 1325–1348.
Kristensen, N., & Johansson, E. (2006). New evidence on cross-country differences in job satisfaction using anchoring vignettes. Labor Economics, 15(1), 96–117.
Krosnick, A. (1999). Survey research. Annual Review of Psychology, 50, 537–567.
Lee, S., Schwarz, N., Taubman, D., & Hou, M. (2010). Sneezing in times of a flu pandemic: Public sneezing increases perception of unrelated risks and shifts preferences for federal spending. Psychological Science, 21, 375–377.
Lindeboom, M., & van Doorslaer, E. (2004). Cut-point shift and index shift in self-reported health. Journal of Health Economics, 23(6), 1083–1099.
López Bóo, F., Madrigal, L., & Pagés, C. (2010). Part-time work, gender, and job-satisfaction: Evidence from a developing country. The Journal of Development Studies, 46(9), 1543–1571.
Lora, E. (2011). Health perceptions in Latin America. Health Policy and Planning. doi:10.1093/heapol/czr078.
Lora, E. (2015). Using life satisfaction data to identify urban problems, prioritize local public expenditures and monitor the quality of urban life. In M. Rojas (Ed.), Handbook of happiness research in Latin America. New York: Springer. Forthcoming.
Lora, E., & Fajardo, J. (2013). Latin American middle classes: The distance between perception and reality. Economia, 14, 33–60.
Mangahas, M. (1995). Self-rated poverty in the Philippines, 1981–1992. International Journal of Public Opinion Research, 7(1), 40–52.
Maris, L., & Ortega, D. (2013). Crime perceptions and reality in Latin America. Unpublished research report. Washington, DC: Inter-American Development Bank.
Mas, A. (2006). Pay, reference points and police performance. Quarterly Journal of Economics, 121(3), 783–821.
Menezes-Filho, A., Botura Corbi, R., & Zaitune, A. (2009). Job insecurity and life satisfaction. In C. Graham & E. Lora (Eds.), Paradox and perception: Measuring quality of life in Latin America. Washington, DC: The Brookings Institution.
Milcent, C., & Etile, F. (2006). Income-related reporting heterogeneity in self-assessed health: Evidence from France. Health Economics, 15(9), 965–981.
Norton, M., & Ariely, D. (2011). Building a better America—One wealth quintile at a time. Perspectives on Psychological Science, 6(1), 9–12.
Nuñez, J. (2005). Living under a veil of ignorance. Santiago: University of Chile. Mimeographed document.
O’Connell, M., & Whelan, A. (1996). The public perception of crime prevalence, newspaper readership and ‘Mean World’ attitudes. Legal and Criminology Psychology, 1(2), 179–195.
Perry, E., et al. (2007). Informality: Exit and exclusion. Washington, DC: World Bank.
Pfeiffer, C., Windzio, M., & Kleimann, M. (2005). Media use and its impacts on crime perception, sentencing attitudes and crime policy. European Journal of Criminology, 2(3), 259–285.
Pinker, S. (1997). How the mind works. New York: W.W. Norton & Company.
Pinker, S. (2002). The blank slate: The modern denial of human nature. New York: Viking.
Poggi, A. (2010). Job satisfaction, working conditions and aspirations. Journal of Economic Psychology, 31(6), 936–949.
Posel, R., & Casale, D. (2011). Relative standing and subjective well-being in south Africa: The role of perceptions, expectations and income mobility. Social Indicators Research, 104(2), 195–223.
Pratap, S., & Quintin, E. (2006). Are labor markets segmented in developing countries? A semiparametric approach. European Economic Review, 50(7), 1817–1841.
Ravallion, M., & Lokshin, M. (1999). Subjective economic welfare (World Bank Policy Research Working Paper 2106). Available at SSRN: http://ssrn.com/abstract=569202
Ravallion, M., & Lokshin, M. (2002). Self-rated economic welfare in Russia. European Economic Review, 46(8), 1453–1473.
Riffault, H. (1991). How poverty is perceived. In K. Reif & R. Inglehart (Eds.), Eurobarometer: The dynamics of European public opinion. London: Macmillan Press.
Rodrigues, D. (2006). Civil democracy, perceived risk, and insecurity in brazil: An extension of the systemic social control model. Annals of the American Academy of Political and Social Science Democracy, Crime, and Justice, 605(5), 242–263.
Russo, S., Roccato, M., & Vieno, A. (2011). Predicting perceived risk of crime: A multilevel study. American Journal of Community Psychology, 48(3–4), 384–394.
Salomon, A., Tandon, A., & Murray, C. (2004). Comparability of self-related health: Cross sectional multi-country survey using anchoring vignettes. British Medical Journal, 328, 258–264.
Sánchez, A., et al. (2012). Evolución Geográfica del Homicidio en Colombia. Documento de Trabajo sobre Economía Regional 169. Banco de la República. Cartagena: Centro de Estudios Económicos Regionales (CEER).
Schaeffer, C., & Presser, S. (2003). The science of asking questions. Annual Review of Sociology, 29, 65–88.
Senik, C. (2009). Direct evidence on income comparisons and their welfare effects. Journal of Economic Behavior & Organization, 72, 408–424.
Sommerfeld, J., et al. (2002). Determinants of variance in health state valuations. In C. J. L. Murray, J. A. Salomon, C. D. Mathers, & A. D. Lopez (Eds.), Summary measures of population health: Concepts, ethics, measurement and applications. Geneva: World Health Organization.
Suárez-Berenguela, M. (2000). Health system inequalities and inequities in Latin America and the Caribbean: Findings and policy implications. Working Paper prepared for the Health and Human Development Division of the Pan American Health Organization/World Health Organization. Washington, DC: World Bank.
Tavris, C., & Aronson, E. (2007). Mistakes were made (but not by me): Why we justify foolish beliefs, bad decisions, and hurtful acts. New York: Hartcourt.
Thaler, H., & Sunstein, C. (2008). Nudge: Improving decisions about health, wealth and happiness. New Haven: Yale University Press.
Tourangeau, R., Rips, L., & Rasinski, K. (2000). The psychology of survey response. Cambridge: Cambridge University Press.
Van Doorslaer, E., & Gerdtham, U. (2003). Does inequality in self-assessed health predict inequality in survival by income? Evidence from Swedish data. Social Science and Medicine, 57(9), 1621–1629.
Vilalta, J. (2012). Los Determinantes de la Percepción de Inseguridad Frente al Delito en México (IDB Working Paper 381). Washington, DC: Inter-American Development Bank.
Warr, P. (2003). Well-being and the workplace. In D. Kahneman, E. Diener, & N. Schwarz (Eds.), Well-being: Foundations of hedonic psychology. New York: Russell Sage Foundation Publications.
Wilson, Q., & Kelling, G. (1982). Broken windows: The police and neighborhood safety. Atlantic Monthly, 3, 29–38.
Wyant, R. (2008). Multilevel impacts of perceived incivilities and perceptions of crime risk on fear of crime: Isolating endogenous impacts. Journal of Research in Crime and Delinquency, 45(1), 39–64.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Springer Science+Business Media Dordrecht
About this chapter
Cite this chapter
Lora, E. (2016). The Distance Between Perception and Reality in the Social Domains of Life. In: Rojas, M. (eds) Handbook of Happiness Research in Latin America. International Handbooks of Quality-of-Life. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-7203-7_30
Download citation
DOI: https://doi.org/10.1007/978-94-017-7203-7_30
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-017-7202-0
Online ISBN: 978-94-017-7203-7
eBook Packages: Social SciencesSocial Sciences (R0)