Working Paper Series
IFAU - Institute for Evaluation of Labour Market and Education Policy
The information method - theory and application
() and Patrik Hesselius
Abstract: When estimating the extent of e.g. excess use of public
benefits one traditionally uses direct monitoring. Such direct estimates
are afflicted with an intrinsic negative bias since you only count what you
find. This paper presents and assesses an alternative intuitive, yet
relatively unexplored, approach that may reduce the bias by making use of
the individual's own response to information of increased monitoring.
Through an extensive randomized social experiment we apply the method to
one particular Swedish public benefit: Parental Benefit for Temporary
Childcare. In our view the application was successful: the results are
interpretable and we are able to surface more hidden excess use through the
information method. As a rough estimate we find that the information based
estimate of excess use is 40 percent higher than the corresponding estimate
based on ordinary random monitoring (22.5 percent compared to 16 percent).
The method is potentially applicable to a large number of related fields,
such as e.g. tax evasion and insurance fraud.
Keywords: Monitoring; Social insurance; Randomized experiments; (follow links to similar papers)
JEL-Codes: C51; C93; H55; (follow links to similar papers)
38 pages, August 20, 2007
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