List randomization for sensitive behavior: An application for measuring use of loan proceeds

Dean S. Karlan*, Jonathan Zinman

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

40 Scopus citations

Abstract

Policymakers and microfinance institutions (MFIs) often claim to target poor entrepreneurs who then invest loan proceeds in their businesses. Typically in non-research 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.

Original languageEnglish (US)
Pages (from-to)71-75
Number of pages5
JournalJournal of Development Economics
Volume98
Issue number1
DOIs
StatePublished - May 1 2012

Keywords

  • Direct elicitation
  • List randomization
  • Microcredit loan use
  • Survey methodology

ASJC Scopus subject areas

  • Development
  • Economics and Econometrics

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