Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338362 
Year of Publication: 
2026
Series/Report no.: 
CESifo Working Paper No. 12398
Publisher: 
Munich Society for the Promotion of Economic Research - CESifo GmbH, Munich
Abstract: 
This paper investigates whether economic hardship undermines preferences for honesty. We use controlled, high-stake measures of cheating for private benefit in a large sample of 5,664 Kenyans, exploiting three complementary sources of variation: experimentally manipulated monetary incentives to cheat, a randomized increase in the salience of one’s own financial situation, and the Covid‑19 income shock (exploiting randomized survey timing, with respondents interviewed before vs. during the crisis). We find that cheating behavior is highly responsive to financial incentives in the experiment. Covid-19 economic hardship — marked by a 51% drop in monthly earnings — leads to a sharp increase in the prevalence of cheating, and the effect increases gradually with prolonged hardship. The effects are largest among the most economically impacted and are amplified when the salience of one’s own financial situation is experimentally increased. The results demonstrate that while most individuals exhibit a strong preference against cheating under normal conditions (in line with the existing body of work), economic forces can account for a substantial share of variation in dishonesty: the estimated cheating rate rises from 29% under low stakes in normal times to 86% under high stakes during the crisis.
Subjects: 
economic hardship
honesty
cheating behavior
field experiment
Kenya
JEL: 
D91
C93
O12
Document Type: 
Working Paper
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