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What Drives Reticence? Reporting Bias from Monopolies and Distrustful Firm Managers

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  • Fola Malomo

Abstract

This article examines the determinants of underreporting (reticence) on randomized response questions. A simple model is created to describe the interview process and draw some conclusion as to why people might misreport their true status despite given the assurance of institutional and statistical confidentiality. By looking at the relationship between firm-specific reticence and other firm-specific and industry-location-specific variables, it is found that (mis)trust (proxied by the proportion of contracts arranged before delivery) is a significant predictor of reticence. Underreporting does not seem to be significantly related to a misunderstanding of the procedure, education, profit levels or guilt. This seems to suggest that firms which are more cautious in their business dealings are also more cautious with the randomized response (RR) technique. In such cases, weighted estimates of the prevalence of sensitive traits might be derived without the use of the RR technique but through the use of variables relating to the nature of firm-level contracts. Moreover, more accurate data on sensitive topics can be extracted from large homogeneous populations. JEL: C81, C83, D81

Suggested Citation

  • Fola Malomo, 2017. "What Drives Reticence? Reporting Bias from Monopolies and Distrustful Firm Managers," Journal of Interdisciplinary Economics, , vol. 29(2), pages 87-131, July.
    • Handle: RePEc:sae:jinter:v:29:y:2017:i:2:p:87-131
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    Keywords

    Trust; behavioural economics; social behaviour; risk; reticence;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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