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Should we trust measures of trust?

Héloise Cloléry (), Guillaume Hollard, Fabien Perez () and Inès Picard ()
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Héloise Cloléry: CREST-Ecole polytechnique, IP Paris
Fabien Perez: CREST-Ensae, IP Paris
Inès Picard: CREST-Genes, IP Paris

No 2022-13, Working Papers from Center for Research in Economics and Statistics

Abstract: Trust is an important economic variable that may however be subject to measurement error, leading to econometric issues such as attenuation bias or spurious correlations. We use a test/retest protocol to assess the measurement error in the two main tasks that are used to elicit trust, namely survey questions and experimental games. We find that trust measures based on the trust game entail substantial measurement error (with up to 15% of noise), while there is virtually no noise in stated trust measures. Given the specificity of our subject pool (students in a top Engineering school) and the short period of time between the test and the retest, we consider these percentages of noise as lower bounds. We also provide a sub-group analysis based on measures of cognitive ability and effort. We find substantial heterogeneity across sub-groups in trust-game behavior, but none for the survey questions. We finally discuss which measure of trust should be used, and the estimation strategies that can be applied to limit the effect of measurement error.

Keywords: Trust; Trust Game; Measurement Error; ORIV. (search for similar items in EconPapers)
JEL-codes: C18 C26 C91 D91 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2022-07-08
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-exp and nep-gth
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