Honest workers or thieves? Take the bagel test

A bagel-seller who trusted customers to pay made surprising discoveries about dishonesty. In an extract from his book this author looks at the psychology of workplace crime

ONCE UPON a time, Paul Feldman dreamed big dreams. Trained as an agricultural economist, he wanted to tackle world hunger. Instead, he took a job in Washington, analysing weapons expenditures for the US Navy. This was in 1962. For the next 20-odd years, he did more of the same. He held senior-level jobs and earned good money, but he wasn’t fully engaged in his work. At the office Christmas party, colleagues would introduce him to their wives not as “the head of the public research group” (which he was) but as “the guy who brings in the bagels”. The bagels had begun as a casual gesture: a boss treating his employees whenever they won a research contract. Then he made it a habit. Every Friday, he would bring in some bagels, a serrated knife, and cream cheese. When employees from neighbouring floors heard about the bagels, they wanted some too. Eventually he was bringing in 15 dozen bagels a week. In order to recoup his costs, he set out a cash basket and a sign with the suggested price. His collection rate was about 95 per cent; he attributed the underpayment to oversight, not fraud ........ SO WHAT does the bagel data have to say? In recent years, there have been two noteworthy trends in the overall payment rate. The first was a long, slow decline that began in 1992. By the summer of 2001, the overall rate had slipped to about 87 per cent. But immediately after 9/11, the rate spiked a full 2 per cent and hasn’t slipped much since. (If a 2 per cent gain in payment doesn’t sound like much, think of it this way: the non-payment rate fell from 13 to 11 per cent, which amounts to a 15 per cent decline in theft.) Because many of Feldman’s customers are affiliated with national security, there may have been a patriotic element to this 9/11 effect. Or it may have represented a more general surge in empathy. Check out http://www.timesonline.co.uk/article/0,,7-1664577_2,00.html for the full story. Extracted from Freakonomics by Steven D. Levitt and Stephen J. Dubner, published by Penguin on July 7 at £20. Available from Times Books First for £16 plus p&p. Tel: 0870 1608080, or visit www.timesonline.co.uk/booksfirst