Contagious Dishonesty: Corruption Scandals and Supermarket Theft

Abstract

Is dishonest behavior contagious? We answer this question by studying whether corruption scandals affect the propensity of supermarket customers to steal while using a self-service checkout system. Crucially, this system provides shoppers with the opportunity to engage in dishonest behavior by under-reporting the value of their shopping cart. Exploiting data from random audits on shoppers, we show that the probability of a shopper underreporting increases by 16% after a local corruption scandal is made public. The effect starts immediately and is particularly strong during the first four days after the story breaks. This effect is not driven by any change in material incentives or social norms. Rather, we show that it is due to a reduction in the self-imposed moral cost of stealing and is mainly concentrated among taxpayers.