The information method - theory and application

Per Engström and Patrik Hesselius

No 2007:17, Working Paper Series from IFAU - Institute for Evaluation of Labour Market and Education Policy

Abstract: When estimating the extent of e.g. excess use of public benefits one traditionally uses direct monitoring. Such direct estimates are afflicted with an intrinsic negative bias since you only count what you find. This paper presents and assesses an alternative intuitive, yet relatively unexplored, approach that may reduce the bias by making use of the individual's own response to information of increased monitoring. Through an extensive randomized social experiment we apply the method to one particular Swedish public benefit: Parental Benefit for Temporary Childcare. In our view the application was successful: the results are interpretable and we are able to surface more hidden excess use through the information method. As a rough estimate we find that the information based estimate of excess use is 40 percent higher than the corresponding estimate based on ordinary random monitoring (22.5 percent compared to 16 percent). The method is potentially applicable to a large number of related fields, such as e.g. tax evasion and insurance fraud.

Keywords: Monitoring; Social insurance; Randomized experiments (search for similar items in EconPapers)
JEL-codes: C51 C93 H55 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2007-08-20
New Economics Papers: this item is included in nep-exp and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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