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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.

Suggested Citation

  • César Martinelli & Susan Wendy Parker, 2009. "Deception and Misreporting in a Social Program," Journal of the European Economic Association, MIT Press, vol. 7(4), pages 886-908, June.
    • Handle: RePEc:tpr:jeurec:v:7:y:2009:i:4:p:886-908
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    References listed on IDEAS

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    1. Eckel, Catherine C. & Grossman, Philip J., 2008. "Differences in the Economic Decisions of Men and Women: Experimental Evidence," Handbook of Experimental Economics Results, in: Charles R. Plott & Vernon L. Smith (ed.), Handbook of Experimental Economics Results, edition 1, volume 1, chapter 57, pages 509-519, Elsevier.
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    3. Currie, Janet, 2004. "The Take-Up of Social Benefits," IZA Discussion Papers 1103, Institute of Labor Economics (IZA).
    4. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    5. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
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    7. Regina T. Riphahn, 2001. "Rational Poverty or Poor Rationality? The Take‐up of Social Assistance Benefits," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(3), pages 379-398, September.
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    More about this item

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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