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Trust and preferences: evidence from survey data

  • Giuseppe Albanese

    ()

    (Bank of Italy)

  • Guido de Blasio

    ()

    (Bank of Italy)

  • Paolo Sestito

    ()

    (Bank of Italy)

This paper considers the role of preferences in explaining trust. By using the Bank of Italy�s Survey on Household Income and Wealth (SHIW), the paper shows that time preferences and risk preferences are key covariates of self-reported trust. They both predict negatively a measure of generalized trust; however, risk aversion is positively correlated with an index of particularized trusting behaviour (which refers to family and friends). Moreover, the results are robust to using a different data source to gauge the role of social preferences and personality traits. The study highlights that neglecting preferences when analysing the role of trust in explaining socio-economic outcomes might pose serious challenges in terms of omitted variables.

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Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 911.

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Date of creation: Apr 2013
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Handle: RePEc:bdi:wptemi:td_911_13
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