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Does Economic Prosperity Breed Trust?


  • Markus Brueckner

    (University of Queensland, Australia)

  • Alberto Chong

    (Georgia State University, USA)

  • Mark Gradstein

    () (BGU)


We explore whether national economic prosperity enhances mutual generalized trust. This is done using panel data of multiple waves of the World Values Surveys, whereby national income levels are instrumented for using exogenous oil price shocks. We find significant and substantial effects of national income on the level of trust in the economy. In particular, a one percent increase in national income tends to cause an average increase of one percentage point (or more) in the likelihood that a person becomes trustful. One possible rationalization for this, exhibited in a simple model, is that perceived prosperity signals that many people are trustworthy.
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  • Markus Brueckner & Alberto Chong & Mark Gradstein, 2015. "Does Economic Prosperity Breed Trust?," Working Papers 1502, Ben-Gurion University of the Negev, Department of Economics.
  • Handle: RePEc:bgu:wpaper:1502

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    References listed on IDEAS

    1. Markus Brückner & Antonio Ciccone & Andrea Tesei, 2012. "Oil Price Shocks, Income, and Democracy," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 389-399, May.
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    3. Ananyev, Maxim & Guriev, Sergei, 2015. "Effect of Income on Trust: Evidence from the 2009 Crisis in Russia," CEPR Discussion Papers 10354, C.E.P.R. Discussion Papers.
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    6. Algan, Yann & Cahuc, Pierre, 2014. "Trust, Growth, and Well-Being: New Evidence and Policy Implications," Handbook of Economic Growth,in: Handbook of Economic Growth, edition 1, volume 2, chapter 2, pages 49-120 Elsevier.
    7. Bjrnskov, Christian, 2009. "Social trust and the growth of schooling," Economics of Education Review, Elsevier, vol. 28(2), pages 249-257, April.
    8. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2007. "Social Capital as Good Culture," NBER Working Papers 13712, National Bureau of Economic Research, Inc.
    9. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, January.
    10. Christian Bjørnskov & Gert Svendsen, 2013. "Does social trust determine the size of the welfare state? Evidence using historical identification," Public Choice, Springer, vol. 157(1), pages 269-286, October.
    11. Christian Bjørnskov, 2010. "How does social trust lead to better governance? An attempt to separate electoral and bureaucratic mechanisms," Public Choice, Springer, vol. 144(1), pages 323-346, July.
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    More about this item


    Generalized trust; national income; oil price shocks;

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • P17 - Economic Systems - - Capitalist Systems - - - Performance and Prospects

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