National Income and Trust

Markus Brückner, Alberto Chong and Mark Gradstein
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Mark Gradstein: Ben Gurion University, Israel

International Center for Public Policy Working Paper Series, at AYSPS, GSU from International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University

Abstract: We explore whether national economic prosperity enhances mutual generalized trust. This is done using panel data of multiple waves of the World Values Surveys, whereby national income levels are instrumented for using exogenous oil price shocks. We find significant and substantial effects of national income on the level of trust in the economy. In particular, a one percent increase in national income tends to cause an average increase of one-percentage point (or more) in the likelihood that a person becomes trustful. We also identify crime and corruption as potential mechanisms that may lead to the reported causal effect and explore heterogeneous effects across individuals.

Pages: 43 pages
Date: 2019-08
New Economics Papers: this item is included in nep-soc
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https://icepp.gsu.edu/files/2019/08/paper1913.pdf (application/pdf)

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Journal Article: National income and trust (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ays:ispwps:paper1913

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