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The role of trust in access to bank loans: Results from field experiments in the ecuadorian amazon

  • Carlos Alpizar
  • Steven Buck
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    In this paper, we distinguish between horizontal and vertical trust. We investigate how these measures of trust, as well as measures of trustworthiness and risk aversion are related to the probability of rural farmers of having had a loan from a bank. Using experimental and survey data from 191 farmers of the Amazon region of Ecuador, we find that: (1) controlling for risk aversion, women do not trust differently than men in each trust game, however, women compared to men do trust outside professionals more than community members, and (2) isolated rural farmers with stronger preferences for trusting outside professionals experience higher levels of bank loan uptake.

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    Paper provided by The Field Experiments Website in its series Artefactual Field Experiments with number 00016.

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    Date of creation: 2006
    Date of revision:
    Handle: RePEc:feb:artefa:00016
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    1. Eckel, Catherine C. & Wilson, Rick K., 2004. "Is trust a risky decision?," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 447-465, December.
    2. Steven N. Durlauf, 2002. "On the Empirics of Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 459-479, November.
    3. Mark M. Pitt & Shahidur R. Khandker, 1998. "The Impact of Group-Based Credit Programs on Poor Households in Bangladesh: Does the Gender of Participants Matter?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 958-996, October.
    4. Laura Schechter, 2005. "Traditional trust measurement and the risk confound: An experiment in rural paraguay," Artefactual Field Experiments 00106, The Field Experiments Website.
    5. Joseph P. Kaboski & Robert M. Townsend, 2005. "Policies and Impact: An Analysis of Village-Level Microfinance Institutions," Journal of the European Economic Association, MIT Press, vol. 3(1), pages 1-50, 03.
    6. Ananish Chaudhuri & Lata Gangadharn, 2003. "Gender Differences in Trust and Reciprocity," Department of Economics - Working Papers Series 875, The University of Melbourne.
    7. Abigail Barr, 2003. "Trust and expected trustworthiness: experimental evidence from zimbabwean villages," Economic Journal, Royal Economic Society, vol. 113(489), pages 614-630, 07.
    8. Jonathan Conning & Sergio Navajas & Claudio Gonzalez-Vega, 2003. "Lending Technologies, Competition, and Consolidation in the Market for Microfinance in Bolivia," Economics Working Paper Archive at Hunter College 213, Hunter College Department of Economics.
    9. Dean S. Karlan, 2005. "Using Experimental Economics to Measure Social Capital and Predict Financial Decisions," Working Papers 182, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    10. Ghatak, Maitreesh, 1999. "Group lending, local information and peer selection," Journal of Development Economics, Elsevier, vol. 60(1), pages 27-50, October.
    11. Dean S. Karlan, 2005. "Using Experimental Economics to Measure Social Capital And Predict Financial Decisions," Working Papers 909, Economic Growth Center, Yale University.
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