List Randomization for Sensitive Behavior: An Application for Measuring Use of Loan Proceeds

Dean Karlan and Jonathan Zinman

No 17475, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Policymakers and microfinance institutions (MFIs) often claim to target poor entrepreneurs who then invest loan proceeds in their businesses. Typically in nonresearch settings these claims are assessed using readily available but unverified self-reports from client loan applications. Alternatively, independent surveyors could directly elicit how borrowers spent their loan proceeds. That too, however, could suffer from deliberate misreporting. We use data from the Peru and the Philippines in which independent surveyors elicited loan use both directly (i.e., by asking how individuals spent their loan proceeds) and indirectly (i.e., through a list-randomization technique that allows individuals to hide their answer from the surveyor). We find that direct elicitation under-reports the non-enterprise uses of loan proceeds.

JEL-codes: B4 D03 O12 (search for similar items in EconPapers)
Date: 2011-10
New Economics Papers: this item is included in nep-mfd
Note: LE
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Citations: View citations in EconPapers (3)

Published as Karlan, Dean S. & Zinman, Jonathan, 2012. "List randomization for sensitive behavior: An application for measuring use of loan proceeds," Journal of Development Economics, Elsevier, vol. 98(1), pages 71-75.

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Journal Article: List randomization for sensitive behavior: An application for measuring use of loan proceeds (2012)
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