Returns to Lying? Identifying the Effects of Misreporting When the Truth is Unobserved

Yingyao Hu and Arthur Lewbel ()

No 678, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: Consider an observed binary regressor D and an unobserved binary variable D*, both of which affect some other variable Y. This paper considers nonparametric identification and estimation of the effect of D on Y, conditioning on D*=0. For example, suppose Y is a person's wage, the unobserved D* indicates if the person has been to college, and the observed D indicates whether the individual claims to have been to college. This paper then identifies and estimates the difference in average wages between those who falsely claim college experience versus those who tell the truth about not having college. We estimate this average effect of lying to be about 6% to 20%. Nonparametric identification without observing D* is obtained either by observing a variable V that is roughly analogous to an instrument for ordinary measurement error, or by imposing restrictions on model error moments.

Keywords: Binary regressor; misclassification; measurement error; unobserved factor; discrete factor; program evaluation; treatment effects; returns to schooling; wage model. (search for similar items in EconPapers)
JEL-codes: C14 C13 C20 I2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ecm
Date: 2007-11-28, Revised 2009-06-16
Note: previously titled "Identifying the Returns to Lying When the Truth is Unobserved"
View list of references

Downloads: (external link)
http://fmwww.bc.edu/EC-P/WP678.pdf main text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:boc:bocoec:678

Access Statistics for this paper

More papers in Boston College Working Papers in Economics from Boston College Department of Economics
Address: Boston College, 140 Commonwealth Avenue, Chestnut Hill MA 02467 USA
Contact information at EDIRC.
Series data maintained by Christopher F Baum ().