# **1. Introduction**

In a classic study that compared survey responses to official records, Locander et al. (1976) found that 19% of survey respondents in Chicago incorrectly claimed possession of a library card. Recently after radio-monitoring meters were installed in cars in the US, the radio ratings company Arbitron realized that past estimates of commuters' listening patterns had been significantly distorted by the survey responses of men who were claiming to listen to more classical and jazz, and less oldies and country music, than was actually the case.<sup>1</sup> Many studies have documented that survey responses indicate much higher rates of church attendance than can be verified from time use diaries, particularly in the United States (Brenner 2011). More seriously, Gong (2012) combines survey data on selfreported sexual activity with the results of tests for sexually transmitted infections, and finds that the latter provide clear evidence that survey respondents underreport their sexual activity. Imagine then how distorted responses might be if a survey asked about breaking the law in a country where privacy protections and legal rights were of concern to respondents. And how might we know the degree of distortion in the absence of pertinent official records, metering, or testing?

Despite these obvious concerns, economics research on corruption usually ignores the possibility that survey respondents are reluctant to give truthful answers to questions on sensitive topics. Svensson (2003) is a telling example of the approach within economics, both because it is a significant contribution to the literature, uncovering important relationships in the corruption behavior of developing country firms, and because of the relative emphasis it places on different methodological problems. The paper provides a careful assessment of different theories of bribe-giving and their implications for econometric specification and interpretation of results. To obtain a representative sample, data collection relied on the large stock of existing knowledge on sampling techniques. A number of convincing robustness exercises were carried out. But based on the candor of survey responses, the paper is forced to conclude that "...cases of misreporting are likely to remain in the sample. For this reason, the paper has not focused on the level of bribes per se, but rather on their correlates" (Svensson 2003 p. 225).

That sums up the current status of economics research on the reticence of survey respondents. Despite the large amount of survey data from firms that is used in empirical papers and is diffused by popular databases such as the World Bank Enterprise Surveys, the discipline does not have much to say about absolute levels of corruption when using data obtained directly from those who pay bribes or those who receive them.<sup>2</sup> Our objective in this paper is to remedy that problem by developing a methodology that allows estimation of the degree of candor and reticence of survey respondents, and simultaneously to use these estimates to determine the degree to which corruption itself has been

> 1 "Never Listen to Céline? Radio Meter Begs to Differ" By Stephanie Clifford. _New York Times_ , December 16th, 2009.

> 2 An exception is Olken (2009), which compared Indonesian villagers' perceptions of corruption in local roadbuilding projects with estimates of actual "missing expenditures", i.e. gaps between what villages reported spending on road-building projects and ex post estimates of the cost of materials based on physical audits of the roads.  For obvious reasons, opportunities to directly measure corruption and contrast it with survey-based estimates are rare.

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