Contagious Dishonesty: Corruption Scandals and Supermarket Theft

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 allows shoppers 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 stealing increases by 16% after a local corruption scandal breaks. This effect is not driven by any change in material incentives. Suggestive evidence shows that it is driven by a reduction in the self-imposed cost of stealing.