Trusting Financial Institutions: Out of Reach, out of Trust?
AbstractThis paper empirically investigates the relationship between individual trust in financial institutions and individual access to these institutions. Based on a large-scale survey of savings patterns of Indians, we find that individuals reporting that they do not have access to certain financial institutions within a commutable distance of one day are less likely to trust these institutions with their money. Moreover, we find that this relationship holds for different banks and financial institutions offering services in low-income areas and that differences in trust can be explained to some extent by differences in individual access.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Universitätsbibliothek Wuppertal, University Library in its series Schumpeter Discussion Papers with number sdp13002.
Date of creation: Feb 2013
Date of revision:
Contact details of provider:
Web page: http://elpub.bib.uni-wuppertal.de
Trust; Financial Institutions; Access; India;
Find related papers by JEL classification:
- D1 - Microeconomics - - Household Behavior
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-01-26 (All new papers)
- NEP-ENT-2013-01-26 (Entrepreneurship)
- NEP-HIS-2013-01-26 (Business, Economic & Financial History)
- NEP-SOG-2013-01-26 (Sociology of Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tim Liao, 1995. "The nonrandom selection of don't knows in binary and ordinal responses: Corrections with the bivariate probit model with sample selection," Quality & Quantity: International Journal of Methodology, Springer, vol. 29(1), pages 87-110, February.
- Gerald J. Pruckner & Rupert Sausgruber, 2009.
"Honesty on the Streets: A Natural Field Experiment on Newspaper Purchasing,"
NRN working papers
2009-24, The Austrian Center for Labor Economics and the Analysis of the Welfare State, Johannes Kepler University Linz, Austria.
- Gerald J. Pruckner & Rupert Sausgruber, 2008. "Honesty on the Streets - A Natural Field Experiment on Newspaper Purchasing," Working Papers 2009-24, Faculty of Economics and Statistics, University of Innsbruck.
- Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2005.
"Trusting the Stock Market,"
CEPR Discussion Papers
5288, C.E.P.R. Discussion Papers.
- Robin Burgess & Rohini Pande, 2003.
"Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment,"
STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers
40, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Robin Burgess & Rohini Pande, 2005. "Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment," American Economic Review, American Economic Association, vol. 95(3), pages 780-795, June.
- Burgess, Robin & Pande, Rohini, 2004. "Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment," CEPR Discussion Papers 4211, C.E.P.R. Discussion Papers.
- Robin Burgess & Rohini Pande, 2004. "Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment," The Centre for Market and Public Organisation 04/104, Department of Economics, University of Bristol, UK.
- Harrison Hong & Jeffrey D. Kubik & Jeremy C. Stein, 2001.
"Social Interaction and Stock-Market Participation,"
NBER Working Papers
8358, National Bureau of Economic Research, Inc.
- Bogan, Vicki, 2008. "Stock Market Participation and the Internet," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 43(01), pages 191-211, March.
- Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
- Levine, Ross & Zervos, Sara, 1996.
"Stock markets, banks, and economic growth,"
Policy Research Working Paper Series
1690, The World Bank.
- Erica Field & Seema Jayachandran & Rohini Pande, 2010. "Do Traditional Institutions Constrain Female Entrepreneurship? A Field Experiment on Business Training in India," American Economic Review, American Economic Association, vol. 100(2), pages 125-29, May.
- Harvey James, 2002. "The Trust Paradox: A Survey of Economic Inquiries Into the Nature of Trust and Trustworthiness," Microeconomics 0202001, EconWPA.
- Werner Boente & Ute Filipiak, 2011. "Financial Investments, Information Flows, and Caste Affiliation - Empirical Evidence from India," Schumpeter Discussion Papers sdp11014, Universitätsbibliothek Wuppertal, University Library.
- Zoran Ivkovic & Scott Weisbenner, 2005. "Local Does as Local Is: Information Content of the Geography of Individual Investors' Common Stock Investments," Journal of Finance, American Finance Association, vol. 60(1), pages 267-306, 02.
- Laura Veldkamp & Stijn Van Nieuwerburgh, 2004.
"Information Immobility and the Home Bias Puzzle,"
04-32, New York University, Leonard N. Stern School of Business, Department of Economics.
- Laura Veldkamp & Stijn Van Nieuwerburgh, 2005. "Information Immobility and the Home Bias Puzzle," 2005 Meeting Papers 78, Society for Economic Dynamics.
- Stijn Van Nieuwerburgh & Laura Veldkamp, 2007. "Information Immobility and the Home Bias Puzzle," NBER Working Papers 13366, National Bureau of Economic Research, Inc.
- Haliassos, Michael & Bertaut, Carol C, 1995. "Why Do So Few Hold Stocks?," Economic Journal, Royal Economic Society, vol. 105(432), pages 1110-29, September.
- James Jr., Harvey S., 2002. "The trust paradox: a survey of economic inquiries into the nature of trust and trustworthiness," Journal of Economic Behavior & Organization, Elsevier, vol. 47(3), pages 291-307, March.
- Dearmon, Jacob & Grier, Kevin, 2009. "Trust and development," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 210-220, August.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Frank Hoffmann).
If references are entirely missing, you can add them using this form.