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Do Trust and Trustworthiness Pay Off?

Author

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  • Joel Slemrod
  • Peter Katuák

Abstract

Are individuals who trust others better off than those who do not? Do trustworthy people prosper more than untrustworthy ones? We formulate and, using data from the World Values Survey, empirically evaluate predictions about the relationship between an individual’s income and his self-reported attitudes toward trust and trustworthiness, and predictions about how these relationships are mediated by the average level of trust and trustworthiness in the country. On average, exhibiting trust has a positive, while exhibiting trustworthiness has a negative impact on income. More strikingly, the payoff to being trustworthy increases with the average level of trust in a given country.

Suggested Citation

  • Joel Slemrod & Peter Katuák, 2005. "Do Trust and Trustworthiness Pay Off?," Journal of Human Resources, University of Wisconsin Press, vol. 40(3).
  • Handle: RePEc:uwp:jhriss:v:40:y:2005:i:2:p621-646
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    Cited by:

    1. Heineck, Guido & Süssmuth, Bernd, 2013. "A different look at Lenin’s legacy: Social capital and risk taking in the Two Germanies," Journal of Comparative Economics, Elsevier, pages 789-803.
    2. Ashraf, Nava & Bohnet, Iris & Piankov, Nikita, 2003. "Is Trust a Bad Investment?," Working Paper Series rwp03-047, Harvard University, John F. Kennedy School of Government.
    3. Breuer, Janice Boucher & McDermott, John, 2009. "Trustworthiness and economic performance," MPRA Paper 16777, University Library of Munich, Germany.
    4. Heineck, Guido & Süssmuth, Bernd, 2013. "A different look at Lenin’s legacy: Social capital and risk taking in the Two Germanies," Journal of Comparative Economics, Elsevier, pages 789-803.
    5. Rainer, Helmut & Siedler, Thomas, 2009. "Does democracy foster trust?," Journal of Comparative Economics, Elsevier, pages 251-269.
    6. Hong, Kessely & Bohnet, Iris, 2007. "Status and distrust: The relevance of inequality and betrayal aversion," Journal of Economic Psychology, Elsevier, pages 197-213.
    7. Alessandro Bucciol & Simona Cicognani & Luca Zarri, 2017. "The Status-Enhancing Power of Sociability," Working Paper series 17-15, Rimini Centre for Economic Analysis.
    8. Rainer, Helmut & Siedler, Thomas, 2006. "Does Democracy Foster Trust? Evidence from the German Reunification," Economics Discussion Papers 8903, University of Essex, Department of Economics.
    9. Alessandro Bucciol & Simona Cicognani & Luca Zarri, 2017. "The Social Status-Enhancing Power of Social Ties," Working Papers 04/2017, University of Verona, Department of Economics.
    10. Lars Osberg & Jonathan Schwabish & Timothy Smeeding, 2004. "Income Distribution and Social Expenditures: A Crossnational Perspective," LIS Working papers 350, LIS Cross-National Data Center in Luxembourg.
    11. repec:sgm:resrep:v:2:i:22:y:2016:p:119-130 is not listed on IDEAS
    12. Johansson-Stenman, Olof, 2008. "Who are the trustworthy, we think?," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 456-465, December.
    13. Peter Katuscak & Joel Slemrod, 2006. "Trust and Trustworthiness in an Economy with Heterogeneous Individuals," CERGE-EI Working Papers wp305, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    14. Meriggi, Niccolo F. & Leuveld, Koen & Gardebroek, Cornelis, 2015. "Dissecting an Investment Game: Evidence From a Field Experiment in Rural Cameroon," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205568, Agricultural and Applied Economics Association;Western Agricultural Economics Association.

    More about this item

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • H40 - Public Economics - - Publicly Provided Goods - - - General

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