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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. Uri Gneezy, 2005. "Deception: The Role of Consequences," American Economic Review, American Economic Association, vol. 95(1), pages 384-394, March.
    2. Janet Currie, 2004. "The Take Up of Social Benefits," NBER Working Papers 10488, National Bureau of Economic Research, Inc.
    3. Eckel, Catherine C. & Grossman, Philip J., 2008. "Differences in the Economic Decisions of Men and Women: Experimental Evidence," Handbook of Experimental Economics Results, Elsevier.
    4. James Banks & Richard Blundell & Agar Brugiavini, 2001. "Risk Pooling, Precautionary Saving and Consumption Growth," Review of Economic Studies, Oxford University Press, vol. 68(4), pages 757-779.
    5. 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.
    6. 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).
    7. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    8. Kartik, Navin & Ottaviani, Marco & Squintani, Francesco, 2007. "Credulity, lies, and costly talk," Journal of Economic Theory, Elsevier, vol. 134(1), pages 93-116, May.
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    Cited by:

    1. Blattman, Christopher & Jamison, Julian & Koroknay-Palicz, Tricia & Rodrigues, Katherine & Sheridan, Margaret, 2016. "Measuring the measurement error: A method to qualitatively validate survey data," Journal of Development Economics, Elsevier, pages 99-112.
    2. Avitabile,Ciro & Bobba,Matteo & Pariguana,Marco, 2015. "High school track choice and financial constraints : evidence from urban Mexico," Policy Research Working Paper Series 7427, The World Bank.
    3. David Coady & César Martinelli & Susan W. Parker, 2013. "Information and Participation in Social Programs," World Bank Economic Review, World Bank Group, vol. 27(1), pages 149-170.
    4. Gonzalez-Navarro, Marco & Quintana-Domeque, Climent, 2009. "The reliability of self-reported home values in a developing country context," Journal of Housing Economics, Elsevier, vol. 18(4), pages 311-324, December.
    5. Bhattacharya, Debopam & Dupas, Pascaline, 2012. "Inferring welfare maximizing treatment assignment under budget constraints," Journal of Econometrics, Elsevier, vol. 167(1), pages 168-196.
    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. 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, December.
    8. Rema Hanna & Vivi Alatas & Abhijit Banerjee & Benjamin A. Olken & Ririn Purnamasari & Matthew Wai-Poi & Christian Daude, 2012. "Ordeal Mechanisms in Targeting: Theory and Evidence from a Field Experiment in Indonesia," CID Working Papers 254, Center for International Development at Harvard University.
    9. David Coady & Cesar Martinelli & Susan Parker, 2008. "Information and participation in a social program," Working Papers 0806, Centro de Investigacion Economica, ITAM.
    10. 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.
    11. Avitabile, Ciro & Bobba, Matteo & Pariguana, Marco, 2017. "High School Track Choice and Liquidity Constraints: Evidence from Urban Mexico," IZA Discussion Papers 10506, Institute for the Study of Labor (IZA).
    12. Marco Manacorda & Edward Miguel & Andrea Vigorito, 2011. "Government Transfers and Political Support," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 1-28, July.
    13. 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.
    14. David Coady & Susan Parker, 2009. "Targeting Social Transfers to the Poor in Mexico," IMF Working Papers 09/60, International Monetary Fund.
    15. Tomer Blumkin & Yoram Margalioth & Efraim Sadka, 2013. "The desirability of workfare in the presence of misreporting," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 20(1), pages 71-88, February.
    16. repec:eee:joecag:v:9:y:2017:i:c:p:111-121 is not listed on IDEAS
    17. Burger, Ronelle & Owens, Trudy, 2010. "Promoting Transparency in the NGO Sector: Examining the Availability and Reliability of Self-Reported Data," World Development, Elsevier, vol. 38(9), pages 1263-1277, September.

    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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