Lies of Reputation: Welfare and the Need for Esteem

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Lies of Reputation: Welfare and the Need for Esteem
By Heath Shive

In 2006, two researchers named Cesar Martinelli and Susan W. Parker published a study on the Mexican welfare program Opportunidades. 

Martinelli and Parker analyzed data from more than one hundred thousand applicants (about 10% of the applicants in the year 2002).

Not surprising, some of the applicants lied. 

What is surprising is how they lied and why.   

And it will either move your heart to disdain or pity…or both.

Those Damn Cheaters

The Opportunidades program has a cash benefit that is equal to about 25% of the average applicant’s annual expenditures.  There’s an obvious economic incentive for people to be on this program…and also incentive to lie to get on the program.

Applicants had to answer questions about the amount of property they owned and the quality of their home.  Many people lied about certain “luxury” items they had.

For example, 83% of the applicants who had cars lied and said that they didn’t have cars.  Also, 73% of the applicants who owned a phone said they didn’t.

They obviously were lying on the questionnaire.  They wanted to look poorer in order to receive the benefits.

But some applicants lied in a more heart-wrenching way.

Those Poor People

Some people lied to look poorer than they actually were. 

But some applicants lied to save their reputation - they lied about how badly off they were! 

Of the applicants who claimed to have a toilet in the house, 39% didn’t have a toilet at all!

Also, 32% of the applicants lied and claimed to have ordinary tap water – when they didn’t have tap water at all!

Some applicants were much worse off than they pretended to be.  They were lying to save face during the interviews. 

They were so ashamed, they claimed to have basic necessities that they couldn’t afford.

Heartwrenching.

The Social Need to Save Face

Economists Steven Levitt and Stephen Dubner wrote about this study in their book “When to Rob a Bank.”

They claimed that the Martinelli-Parker study showed two insights.

First, we should not underestimate the lies people will say to protect their reputation.  As Dubner writes: “Of the many reasons that people lie…the lie of reputation is the most interesting – as opposed to a lie to gain advantage, to avoid trouble, to get out of an obligation, etc.”

People may lie about how badly they are doing because they don’t want your pity or condescension. 

Second, the study also shows researchers to naturally distrust self-reported data.  Some will lie to gain advantage, while others will lie to save face and spare themselves shame.

Conclusion

There is a general disdain by society's majority for those on poverty assistance programs - which is odd, because most people take "subsidies" in many forms from tax breaks, tax cuts, student and farmer aid, etc. 

But poverty assistance - like poverty itself - carries extreme social stigma.  We need to realize that their economic need does not preclude their need for self-esteem and dignity.    

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Sources:
Levitt, Steven D. & Stephen J. Dubner.  When to Rob a Bank.  William Morrow, 2015. 
Martinelli, Cesar, and Susan W. Parker.  “Deception and Misreporting in a Social Program,” Centro de Investigacion Economica discussion paper 06-02, June 2006.    

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