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Estimating Mis-reporting in Dyadic Data: Are Transfers Mutually Beneficial?

Margherita Comola () and Marcel Fafchamps ()

No 8664, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Many studies have used self-reported dyadic data without exploiting the pattern of discordant answers. In this paper we propose a maximum likelihood estimator that deals with mis-reporting in a systematic way. We illustrate the methodology using dyadic data on inter-household transfers (gifts and loans) from the village of Nyakatoke in Tanzania, investigating whether observed transfers are mutually beneficial, i.e. in the self-interest of both parties involved. Our results suggest that mutual self-interest is not a necessary condition for transfers between households who are sufficiently close socially and geographically to take place, and we show that not taking reporting bias into account leads to serious underestimation of the total amount of transfers between villagers.

Keywords: social networks; dyadic data; reporting bias; informal transfers (search for similar items in EconPapers)
JEL-codes: C13 C51 D85 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2014-11
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