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Deception and Misreporting in a Social Program

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  • César Martinelli
  • Susan Wendy Parker

Abstract

We investigate empirically the extent of misreporting in a poverty alleviation program in which self-reported information, followed by a household visit, is used to determine eligibility. In the model we propose and estimate, underreporting may be due to a deception motive, and overreporting to an embarrassment motive. We find that underreporting of goods and desirable home characteristics is widespread, and that overreporting is common with respect to goods linked to social status. Larger program benefits encourage underreporting and discourage overreporting. We also estimate the costs of lying and embarrassment for different goods, and show that the embarrassment cost for lacking a good is proportional to the percentage of households who own the good. (JEL: D01, I32, I38, C25) (c) 2009 by the European Economic Association.

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Bibliographic Info

Article provided by MIT Press in its journal Journal of the European Economic Association.

Volume (Year): 7 (2009)
Issue (Month): 4 (06)
Pages: 886-908

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Handle: RePEc:tpr:jeurec:v:7:y:2009:i:4:p:886-908

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References

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  1. Kartik, Navin & Ottaviani, Marco & Squintani, Francesco, 2007. "Credulity, lies, and costly talk," Journal of Economic Theory, Elsevier, vol. 134(1), pages 93-116, May.
  2. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-74, June.
  3. Currie, Janet, 2004. "The Take-Up of Social Benefits," IZA Discussion Papers 1103, Institute for the Study of Labor (IZA).
  4. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
  5. Eckel, Catherine C. & Grossman, Philip J., 2008. "Differences in the Economic Decisions of Men and Women: Experimental Evidence," Handbook of Experimental Economics Results, Elsevier.
  6. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
  7. James Banks & Richard Blundell & Agar Brugiavini, 1999. "Risk pooling, precautionary saving and consumption growth," IFS Working Papers W99/19, Institute for Fiscal Studies.
  8. Riphahn, Regina T., 2000. "Rational Poverty or Poor Rationality? The Take-up of Social Assistance Benefits," IZA Discussion Papers 124, Institute for the Study of Labor (IZA).
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Citations

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Cited by:
  1. Marco Manacorda & Edward Miguel & Andrea Vigorito, 2009. "Government Transfers and Political Support," NBER Working Papers 14702, National Bureau of Economic Research, Inc.
  2. Coady, David & Martinelli, Cesar & Parker, Susan W., 2013. "Information and participation in social programs," Policy Research Working Paper Series 6319, The World Bank.
  3. González-Flores, Mario & Heracleous, Maria & Winters, Paul, 2012. "Leaving the Safety Net: An Analysis of Dropouts in an Urban Conditional Cash Transfer Program," World Development, Elsevier, vol. 40(12), pages 2505-2521.
  4. Bhattacharya, Debopam & Dupas, Pascaline, 2012. "Inferring welfare maximizing treatment assignment under budget constraints," Journal of Econometrics, Elsevier, vol. 167(1), pages 168-196.
  5. Ronelle Burger & Trudy Owens, . "Promoting transparency in the NGO sector: Examining the availability and reliability of self-reported data," Discussion Papers 08/11, University of Nottingham, CREDIT.
  6. Peter Dodds & Christopher Danforth, 2010. "Measuring the Happiness of Large-Scale Written Expression: Songs, Blogs, and Presidents," Journal of Happiness Studies, Springer, vol. 11(4), pages 441-456, August.
  7. Climent Quintana & Marco González, 2008. "The reliability of self-reported home values in a developing country context," Working Papers. Serie AD 2008-18, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  8. Martha Bottia & Lina Cardona-Sosa & Carlos Medina, 2012. "El SISBEN como mecanismo de focalización individual del régimen subsidiado en salud en Colombia: ventajas y limitaciones," REVISTA DE ECONOMÍA DEL ROSARIO, UNIVERSIDAD DEL ROSARIO.
  9. Tomer Blumkin & Yoram Margalioth & Efraim Sadka, 2013. "The desirability of workfare in the presence of misreporting," International Tax and Public Finance, Springer, vol. 20(1), pages 71-88, February.
  10. Linden, Leigh L. & Shastry, Gauri Kartini, 2012. "Grain inflation: Identifying agent discretion in response to a conditional school nutrition program," Journal of Development Economics, Elsevier, vol. 99(1), pages 128-138.
  11. David Coady & Susan Parker, 2009. "Targeting Social Transfers to the Poor in Mexico," IMF Working Papers 09/60, International Monetary Fund.
  12. Vivi Alatas & Abhijit Banerjee & Rema Hanna & Benjamin A. Olken & Ririn Purnamasari & Matthew Wai-Poi, 2013. "Ordeal Mechanisms In Targeting: Theory And Evidence From A Field Experiment In Indonesia," NBER Working Papers 19127, National Bureau of Economic Research, Inc.
  13. David Coady & Cesar Martinelli & Susan Parker, 2008. "Information and participation in a social program," Working Papers 0806, Centro de Investigacion Economica, ITAM.

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