A Simple Question Goes a Long Way: A Wording Experiment on Bank Account Ownership

Abstract

Ownership of a bank account is an objective measure and should be relatively easy to elicit via survey questions. Yet, depending on the interview mode, the wording of the question and its placement within the survey may influence respondents' answers. The Health and Retirement Study (HRS) asset module, as administered online to members of the Understanding America Study (UAS), yielded substantially lower rates of reported bank account ownership than either a single question on ownership in the Current Population Survey (CPS) or the full asset module administered to HRS panelists (both interviewer-administered surveys). We designed and implemented an experiment in the UAS comparing the original HRS question eliciting bank account ownership with two alternative versions that were progressively simplified. We document strong evidence that the original question leads to systematic underestimation of bank account ownership. In contrast, the proportion of bank account owners obtained from the simplest alternative version of the question is very similar to the population benchmark estimate. We investigate treatment effect heterogeneity by cognitive ability and financial literacy. We find that questionnaire simplification affects responses of individuals with higher cognitive ability substantially less than those with lower cognitive ability. Our results suggest that high-quality data from surveys start from asking the right questions, which should be as simple and precise as possible and carefully adapted to the mode of interview.

Keywords: Bank account ownership; Cognitive ability; Experiment; Online probability panel; Question wording.

Figure 1.

Bank Account Ownership Rates across Treatments.

Figure 2.

Treatment Effect Heterogeneity by Cognitive Ability. Note: Dependent variable: binary indicator of bank account ownership. For Simple II version, the indicator is 1 if the respondent answers affirmatively either the question about checking/savings account ownership or the one about money market fund ownership. We estimate an OLS regression of bank account ownership on treatment indicators interacted with cognitive ability score quartile indicators. Other controls include gender, race/ethnicity, age, education, household income, and financial literacy score quartile indicators. HRS to Simple I is the marginal effect (multiplied by 100) of the Simple I treatment indicator evaluated at different cognition quartiles. HRS to Simple II is the marginal effect (multiplied by 100) of the Simple II treatment indicator evaluated at different cognition quartiles. Simple I to Simple II is the difference (multiplied by 100) between the marginal effects of the Simple II and Simple I treatment indicators evaluated at different cognition quartiles. We test pairwise differences in treatment effects between cognition quartiles. ***p < 0.01, **p < 0.05.