So you're walking down the street and you spot a wallet lying on the ground. You open it and spy some cash. What do you do?

Key points: Study of over 17,000 'lost' wallets showed people in 38 of 40 countries were more likely to return wallets if they contained money

The more money in the wallet, the more likely people were to return it

Altruism combined with people's desire not to think of themselves as a thief may help explain the findings

According to classical economic theory, your self interest in keeping the cash is likely to over-ride the more honest behaviour of returning the wallet.

But new research carried out in 40 countries has found we're more honest than we think — at least when it comes to returning lost wallets to strangers.

A study of over 17,000 'lost' wallets in 355 cities revealed that people were more likely to return a wallet if it had money in it than when it was empty.

Not only that, but the more money in the wallet, the more likely people were to return it.

If you found a lost wallet in the street, would you return it? ( Getty:aaaaimages )

In the study, published today in the journal Science, a team of people handed in wallets they claimed to have found on the street to front desk staff at banks, post offices, museums and other major institutions.

The wallets contained either no money or the equivalent of US$13.45 in local currency, a grocery list, and three identical business cards in the local language, which made it possible to return the wallet.

The researchers found that people in 38 out of the 40 countries were more likely to return the wallet if it had money in it.

"This is something we didn't expect," said behavioural economist Alain Cohn of the University of Michigan.

In field work involving just three countries, Dr Cohn and team found that upping the amount of money to US$94.15 increased the average return of wallets by 18 per cent.

So what's going on?

Dr Cohn said two factors could explain the findings.

"One is altruism — where you care about the other person even though they are a stranger."

This was supported by findings that wallets containing a key were more likely to be returned than wallets that didn't.

While keys are valuable to the owner they are not so valuable to a stranger, Dr Cohn said.

But, he said, altruism doesn't explain everything. Surveys showed people didn't like to view themselves as dishonest.

People don't like to think of themselves as thieves. ( Getty: Bart Geerligs )

"They said the more money in the wallet, the more they would feel like a thief if they didn't return it," he said.

"The larger the amount of money, the more worried you are about your self image — the more difficult it is to convince yourself that you're still a good person."

Can fear of being caught explain findings?

To control for the possibility that people were just worried about being caught, the researchers checked to see if anyone else saw the front desk employee receive the wallet, and whether there were any security cameras around at the time.

They also made a note of whether there were local laws against people keeping lost property.

But they found none of this could explain the increase in returns when there was money in the wallet.

"It's unlikely punishment concerns were driving results," Dr Cohn said.

Interestingly, a group of US laypeople and economics experts surveyed by the researchers predicted that people would be less likely to return the wallet when there was money inside.

"We tend to be overly pessimistic and think that financial incentives matter most," Dr Cohn said.

This could have implications for those trying to design incentives to keep people honest, he added.

Differences between countries

The actual percentage of wallets returned differed quite substantially between countries.

The researchers ranked countries in a league table according to the percentage of empty wallets returned and found Switzerland came out on top with 74 per cent.

"I could never keep a lost wallet," confessed Dr Cohn, who is himself Swiss. "I've never stolen anything in my life, not even chewing gum."

When it came to wallets with money in them, all but two countries showed an increase in the rate of return, with some interesting results.

For example, in Australia, 69 per cent of 'lost' wallets containing cash were returned, but only 57 per cent were returned in the US.

Dr Cohn said the league table may reflect findings that greater honesty is correlated with such things as a country's level of education and wealth.

While honesty may promote economic growth — it's easier to do business if you can trust the other party — it's also easier to be honest when economic conditions are favourable.

'A new way to assess human honesty'

Economist Shaul Shalvi of the University of Amsterdam said Dr Cohn and colleagues offered "a new way to assess human honesty".

While he agreed the findings were "rather surprising", he wondered whether the results would reflect what would happen in a diverse globalised society.

"By having the grocery list and business cards written in the local language, the authors identified the wallet owner as local," he wrote in an accompanying perspectives article.

Dr Shalvi said people were more likely to act kindly toward members of their own group than members of other groups.

"Prosocial and honest behaviours are often parochial," he said.

"The results reported by Cohn et al. may thus scale down when civic honesty is expressed toward non-locals, including tourists or immigrants."

Honesty is not only important in personal relationships but it's also easier to do business if you trust the other party. ( Getty:Virojt Changyencham )

But some researchers like Simon Moss, a senior lecturer in psychology at Charles Darwin University, were less surprised.

He said the findings aligned with past research, which has suggested other factors that influence people's honesty.

"People are more likely to return anything, including wallets, when the object comprises more evidence of humanness, such as photos," Dr Moss said.

He also said some people were more likely to return wallets if they perceived life as unpredictable but generally fair — in other words "what goes around comes around".

People might also return wallets simply because they feel watched, even if they're not, Dr Moss added.

"Even pictures of eyes on a wall increases the unconscious sense they are being monitored."

What about the people who don't return wallets?

While the results might give us a sense of optimism for humanity, a large number of people failed to hand the wallets in — for example, 31 per cent of people in Australia didn't return a wallet containing money.

And that matters, according to behavioural economist Morris Altman, dean of the Newcastle University Business School.

"It's not all about money, a point made some time ago," Professor Altman said.

"But the data also suggests there are people who do behave in a narrowly selfish manner. Such individuals must also be understood as they also affect socio-economic outcomes."