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Hitting Rock Bottom: Economic Hardship and Cheating
This paper investigates whether severe economic hardship undermines preferences for honesty. We use controlled, incentivized measures of cheating for private benefit in a large, diverse sample of 5,676 Kenyans, exploiting three complementary sources of variation: experimentally manipulated monetary incentives, randomized increase in salience of own financial situation, and the Covid‑19 income shock, exploiting randomized survey timing as a natural experiment with respondents surveyed before and during the crisis. We find that severe economic hardship—marked by a 40% drop in monthly earnings— leads to a sharp increase in the prevalence of cheating, from 43% to 72%. Cheating behaviour is highly responsive to financial incentives and increases gradually with prolonged hardship. The effects are largest among the most economically impacted and are amplified when salience of own financial situation is experimentally increased. Predictable seasonal income fluctuations, in contrast, do not affect honesty. The results demonstrate that while most individuals exhibit a strong preference against cheating under normal conditions, severe economic hardship substantially erodes honesty.
Date:
3 March 2026, 16:00
Venue:
Manor Road Building, Manor Road OX1 3UQ
Venue Details:
Skills Lab
Speaker:
Julie Chytilova (Charles University)
Organising department:
Department of Economics
Part of:
Applied Microeconomics Seminar
Booking required?:
Not required
Audience:
Members of the University only
Editor:
Edward Valenzano
