How misreporting in economic surveys affects development aid decisions
Individuals may misreport in a calculated fashion to increase earnings in a study context or to shape the results of the study if they believe that it will inform policy.
The standard way in which the World Bank and other policy organizations develop statistics is through individuals' responses to questions in economic surveys.
In these surveys, accurate data on the key economic variables that affecting people who have been forcibly displaced, such as consumption and assets, is essential to understand their situation and developing evidence‐based policies to support them.
People may want to tell the truth but are prevented from doing so due to cognitive or social barriers.
Some misreporting is purposeful. Individuals may misreport in a calculated fashion to increase earnings in a study context or to shape the results of the study if they believe that it will affect policy decisions.
It is not surprising that this problem might arise in the context of development aid, an area rife with perverse incentives.
If it is the case that survey respondents are reporting dishonestly, the inaccuracies it generates in the data are highly problematic. At best, it makes the data spurious and unusable. At worst, it could lead to misallocations of aid, from more vulnerable areas to less vulnerable areas, or from solutions emphasizing sustainability to immediate relief where immediate relief is unnecessary.
Due to the dangerous environment in the humanitarian crisis-hit places, it is not currently possible to use alternative data collection methods.
To tackle this, World Bank has come up a proposal that might be helpful.
(With inputs from World Bank)