Do reticent managers lie during firm surveys?

Clarke, George (2012): Do reticent managers lie during firm surveys?

Abstract

Previous studies have shown that reticent managers, who are identified through a series of random-response questions, answer questions about corruption, firm performance and how honest they are differently from other managers. If reticent managers’ answers are different because they are lying, estimates of these behaviors will be inaccurate. But it is also possible that reticent managers answer questions differently because they and their firms are different. This paper presents evidence consistent with the idea that reticent managers lie. First, it shows that reticent managers in Nigeria report that their firms pay higher wages than other firms. This is consistent with previous studies that have found that they also report better performance. Second, it shows that workers at firms with reticent managers report lower, or similar, wages to workers at other firms. The different responses of the managers and the workers suggest that reticent managers are lying. That is, reticent managers in Nigeria report paying higher wages but they are not doing so.

• Item Type: MPRA Paper
• Language: English
• Keywords: Reticence; Nigeria; Africa; Corruption; Wages
• Subjects: D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption; ; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development

References

Azfar, Omar, and Peter Murrell. 2009. "Identifying Reticent Respondents: Assessing the Quality of Survey Data on Corruption and Values." Economic Development and Cultural Change 57(2):387–411.Available online at http://dx.doi.org/doi:10.1086/592840.

Clarke, George R. G. 2011. "Lying about Firm Performance: Evidence from a Firm Survey in Nigeria." Texas A&M International University: Laredo, TX. Available on line at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1971575.

Clausen, Bianca, Aart Kraay, and Peter Murrell. 2010. "Does Respondent Reticence Affect the Results of Corruption Surveys? Evidence from World Bank Enterprise Survey for Nigeria." Policy Research Working Paper 5415. World Bank, Washington DC. Available on line at http://go.worldbank.org/J10YIDC0A0.

Fox, James Alan, and Paul E Tracy. 1986. Randomized Response: A Method for Sensitive Surveys. Newbury Park, CA: Sage Publications.

Iarossi, Giuseppe. 2006. The Power of Survey Design. Washington DC: World Bank.

Iarossi, Giuseppe, and George R. G. Clarke, eds. 2011. Nigeria 2011: An Assessment of the Investment Climate in 26 States. Washington DC: World Bank.

Iarossi, Giuseppe, Peter Mousley, and Ismail Radwan. 2009. An Assessment of the Investment Climate in Nigeria. Washington DC: World Bank.

Jensen, Nathan M., and Aminur Rahman. 2011. "The Silence of Corruption: Identifying Underreporting of Business Corruption through Randomized Response Techniques." Policy Research Working Paper 5696. World Bank, Washington DC.

Karlan, Dean, and Jonathan Zinman. 2008. "Lying About Borrowing." Journal of the European Economic Association 6(2-3):510–521.

Karlan, Dean, and Jonathan Zinman. 2012. "List Randomization for Sensitive Behavior: An Application for Measuring Use of Loan Proceeds." Journal of Development Economics 98(1):71–75.

Lensvelt-Mulders, Gerty J. L. M., Joop J. Hox, Peter G. M. Van Der Heuden, and Cora J. M. Maas. 2005. "Meta-Analysis of Randomized Response Research: Thirty-Five Years of Validation." Sociological Methods and Research 35(3):319–348.

Mincer, Jacob. 1974. Schooling, Experience and Earnings. New York, NY: Columbia University Press.

Moulton, Brent R. 1986. "Random Group Effects and the Precision of Regression Estimates." Journal of Econometrics 32(3):386–397.

Recanatini, Francesca, Scott Wallsten, and Lixin Colin Xu. 2000. "Surveying Surveys and Questioning Questions: Learning from World Bank Experience." Policy Research Working Paper 2307. World Bank, World Bank, Washington DC. Available on line at http://go.worldbank.org/STNT704T40.

Tourangeau, Roger, and Tom W. Smith. 1996. "Asking Sensitive Questions: The Impact of Data Collection Mode, Question Formal, and Question Context." Public Opinion Quarterly 60(2):275–304