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Trusting Only Whom You Know, Knowing Only Whom You Trust: The Joint Impact of Social Capital and Trust on Happiness in CEE Countries

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  • Katarzyna Growiec

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  • Jakub Growiec

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Abstract

We investigate the extent to which bridging and bonding social capital as well as social trust and individuals’ earnings interdependently affect self-reported happiness. The study is based on cross-sectional World Values Survey 2000 data on individuals from eight Central and Eastern European countries (CEECs). We identify high risk of regressor endogeneity and omitted variables bias in happiness regressions, and eliminate them using instrumental variables and an appropriate set of controls. The endogeneity issue has been generally overlooked in earlier studies. Our study therefore provides novel implications for the general discussion on the causal relationships between the five considered variables. Our results are also discussed in the specific context of socio-economic convergence processes currently taking place in CEECs. Copyright The Author(s) 2014

Suggested Citation

  • Katarzyna Growiec & Jakub Growiec, 2014. "Trusting Only Whom You Know, Knowing Only Whom You Trust: The Joint Impact of Social Capital and Trust on Happiness in CEE Countries," Journal of Happiness Studies, Springer, vol. 15(5), pages 1015-1040, October.
  • Handle: RePEc:spr:jhappi:v:15:y:2014:i:5:p:1015-1040
    DOI: 10.1007/s10902-013-9461-8
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    References listed on IDEAS

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    1. Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
    2. Jan Fidrmuc, 2012. "How Persistent is Social Capital?," CEDI Discussion Paper Series 12-04, Centre for Economic Development and Institutions(CEDI), Brunel University.
    3. Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
    4. Sjoerd Beugelsdijk & Sjak Smulders, 2003. "Bridging and Bonding Social Capital: which type is good for economic growth?," ERSA conference papers ersa03p517, European Regional Science Association.
    5. Ambrose Leung & Cheryl Kier & Tak Fung & Linda Fung & Robert Sproule, 2011. "Searching for Happiness: The Importance of Social Capital," Journal of Happiness Studies, Springer, vol. 12(3), pages 443-462, June.
    6. Alberto Alesina & Paola Giuliano, 2010. "The power of the family," Journal of Economic Growth, Springer, vol. 15(2), pages 93-125, June.
    7. Christian Kroll, 2011. "Different Things Make Different People Happy: Examining Social Capital and Subjective Well-Being by Gender and Parental Status," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 104(1), pages 157-177, October.
    8. Amelie Gamble & Tommy Gärling, 2012. "The Relationships Between Life Satisfaction, Happiness, and Current Mood," Journal of Happiness Studies, Springer, vol. 13(1), pages 31-45, March.
    9. Helliwell, John F., 2003. "How's life? Combining individual and national variables to explain subjective well-being," Economic Modelling, Elsevier, vol. 20(2), pages 331-360, March.
    10. Growiec, Katarzyna & Growiec, Jakub, 2014. "Social Capital, Trust, And Multiple Equilibria In Economic Performance," Macroeconomic Dynamics, Cambridge University Press, vol. 18(2), pages 282-315, March.
    11. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    12. Growiec, Jakub & Growiec, Katarzyna, 2007. "Social Capital, Well-Being, and Earnings: Theory and Evidence from Poland," MPRA Paper 7071, University Library of Munich, Germany.
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    Citations

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    Cited by:

    1. Katarzyna Growiec & Jakub Growiec, 2016. "Bridging Social Capital and Individual Earnings: Evidence for an Inverted U," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(2), pages 601-631, June.
    2. Salvador Saz-Salazar & Ana Navarrete-Tudela & José Ramón Alcalá-Mellado & Daniel Carlos Saz-Salazar, 2019. "On the Use of Life Satisfaction Data for Valuing Cultural Goods: A First Attempt and a Comparison with the Contingent Valuation Method," Journal of Happiness Studies, Springer, vol. 20(1), pages 119-140, January.
    3. Silvia Camussi & Anna Laura Mancini, 2016. "Individual trust: does quality of public services matter?," Temi di discussione (Economic working papers) 1069, Bank of Italy, Economic Research and International Relations Area.
    4. Urszula Markowska-Przybyla & David Ramsey, 2014. "A game theoretical study of generalized trust and reciprocation in Poland: I. Theory and experimental design," Operations Research and Decisions, Wroclaw University of Technology, Institute of Organization and Management, vol. 3, pages 59-76.
    5. Katarzyna Growiec & Jakub Growiec & Bogumil Kaminski, 2017. "Social Network Structure and The Trade-Off Between Social Utility and Economic Performance," Working Papers 2017-026, Warsaw School of Economics, Collegium of Economic Analysis.
    6. Francesco Sarracino & Marcin Piekałkiewicz, 0. "The Role of Income and Social Capital for Europeans’ Well-Being During the 2008 Economic Crisis," Journal of Happiness Studies, Springer, vol. 0, pages 1-28.
    7. Qiang Li & Lian An, 2020. "Corruption Takes Away Happiness: Evidence from a Cross-National Study," Journal of Happiness Studies, Springer, vol. 21(2), pages 485-504, February.
    8. Jakub Growiec, 2018. "The Digital Era, Viewed From a Perspective of Millennia of Economic Growth," Working Papers 2018-034, Warsaw School of Economics, Collegium of Economic Analysis.
    9. Niels Spierings, 2017. "Trust and Tolerance across the Middle East and North Africa: A Comparative Perspective on the Impact of the Arab Uprisings," Politics and Governance, Cogitatio Press, vol. 5(2), pages 4-15.
    10. Katarzyna Growiec & Jakub Growiec & Bogumil Kaminski, 2018. "Social Network Dynamics: Individual-Level Mechanisms and Aggregate Outcomes," Working Papers 2018-036, Warsaw School of Economics, Collegium of Economic Analysis.

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