Do Trust and Trustworthiness Pay Off?

Joel Slemrod and Peter Katuscak ()

No 9200, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Are individuals who trust others better off than those who do not? Do trustworthy people prosper more than untrustworthy ones? We first pose these questions in a search model where individuals face repeated choices between trusting (initiating an investment transaction) and not trusting, and between being trustworthy (not stealing the investment) and cheating. We then derive predictions for the relationship between observed individual behavior, aggregate attitudes, and individual prosperity. Finally, we evaluate these predictions empirically using household-level data for eighteen (mostly developed) countries from the World Values Survey. We find that, on average, a trusting attitude has a positive impact on income, while trustworthiness has a negative impact on income. In addition, we find evidence of complementarity between these two attitudes and the aggregate levels of the complementary attitudes. Most strikingly, the payoff to being trustworthy depends positively on the aggregate amount of trust in a given country.

JEL-codes: H40 J30 (search for similar items in EconPapers)
Date: 2002-09
New Economics Papers: this item is included in nep-mic
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Published as Slemrod, Joel and Peter Katuscak. "Do Trust and Trustworthiness Pay Off?," Journal of Human Resources, 2005, v40(3,Summer), 621-646.

Downloads: (external link)
http://www.nber.org/papers/w9200.pdf (application/pdf)

Related works:
Journal Article: Do Trust and Trustworthiness Pay Off? (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:9200

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w9200

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().