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New Evidence on Trust and Well-being

Author

Listed:
  • John F. Helliwell
  • Haifang Huang
  • Shun Wang

Abstract

This paper first uses data from three large international surveys – the Gallup World Poll, the World Values Survey and the European Social Survey – to estimate income-equivalent values for social trust, with a likely lower bound equivalent to a doubling of household income. Second, the more detailed and precisely measured trust data in the European Social Survey (ESS) show that social trust is only a part of the overall climate of trust. While social trust and trust in police are the most important elements, there are significant additional benefits from trust in three aspects of the institutional environment: the legal system, parliament and politicians. Thus estimates of the total well-being value of a trustworthy environment are larger than those based on social trust alone. Third, the ESS data show that living in a high-trust environment makes people more resilient to adversity. Being subject to discrimination, ill-health or unemployment, although always damaging to subjective well-being, is much less damaging to those living in trustworthy environments. These results suggest a fresh set of links between trust and inequality. Individuals who are subject to discrimination, ill-health or unemployment are typically concentrated towards the lower end of any national distribution of happiness. Thus the resilience-increasing feature of social trust reduces well-being inequality by channeling the largest benefits to those at the low end of the well-being distribution.

Suggested Citation

  • John F. Helliwell & Haifang Huang & Shun Wang, 2016. "New Evidence on Trust and Well-being," NBER Working Papers 22450, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22450
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    References listed on IDEAS

    as
    1. David A. Fleming & Alberto Chong & Hernán D. Bejarano, 2014. "Trust and Reciprocity in the Aftermath of Natural Disasters," Journal of Development Studies, Taylor & Francis Journals, vol. 50(11), pages 1482-1493, November.
    2. Yukiko Uchida & Yoshiaki Takahashi & Kentaro Kawahara, 2014. "Changes in Hedonic and Eudaimonic Well-Being After a Severe Nationwide Disaster: The Case of the Great East Japan Earthquake," Journal of Happiness Studies, Springer, vol. 15(1), pages 207-221, February.
    3. Eiji Yamamura & Yoshiro Tsutsui & Chisako Yamane & Shoko Yamane & Nattavudh Powdthavee, 2015. "Trust and Happiness: Comparative Study Before and After the Great East Japan Earthquake," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 123(3), pages 919-935, September.
    4. Luca Crivelli & Sara Della Bella & Mario Lucchini, 2016. "Happiness and health," Chapters,in: Handbook of Research Methods and Applications in Happiness and Quality of Life, chapter 17, pages 372-399 Edward Elgar Publishing.
    5. John F. Helliwell, 2006. "Well-Being, Social Capital and Public Policy: What's New?," Economic Journal, Royal Economic Society, vol. 116(510), pages 34-45, March.
    6. Lau, Maggie & Li, Wanxin, 2011. "The extent of family and school social capital promoting positive subjective well-being among primary school children in Shenzhen, China," Children and Youth Services Review, Elsevier, vol. 33(9), pages 1573-1582, September.
    7. 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.
    8. Hideki Toya & Mark Skidmore, 2014. "Do Natural Disasters Enhance Societal Trust?," Kyklos, Wiley Blackwell, vol. 67(2), pages 255-279, May.
    9. Marco Castillo & Michael Carter, 2011. "Behavioral Responses to Natural Disasters," Working Papers 1026, George Mason University, Interdisciplinary Center for Economic Science.
    10. Matthew G. Nagler, 2013. "Does Social Capital Promote Safety On The Roads?," Economic Inquiry, Western Economic Association International, vol. 51(2), pages 1218-1231, April.
    11. John F. Helliwell & Aneta Bonikowska & Hugh Shiplett, 2016. "Migration as a Test of the Happiness Set Point Hypothesis: Evidence from Immigration to Canada," NBER Working Papers 22601, National Bureau of Economic Research, Inc.
    12. Yip, Winnie & Subramanian, S.V. & Mitchell, Andrew D. & Lee, Dominic T.S. & Wang, Jian & Kawachi, Ichiro, 2007. "Does social capital enhance health and well-being? Evidence from rural China," Social Science & Medicine, Elsevier, vol. 64(1), pages 35-49, January.
    13. Leonard Goff & John F. Helliwell & Guy Mayraz, 2016. "The Welfare Costs of Well-being Inequality," NBER Working Papers 21900, National Bureau of Economic Research, Inc.
    14. Matthew G Nagler & Nicholas J Ward, 2016. "Lonely Highways: The Role of Social Capital in Rural Traffic Safety," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 42(1), pages 135-156, January.
    15. John Helliwell, 2007. "Well-Being and Social Capital: Does Suicide Pose a Puzzle?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 81(3), pages 455-496, May.
    16. Matthew E. Kahn, 2005. "The Death Toll from Natural Disasters: The Role of Income, Geography, and Institutions," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 271-284, May.
    17. John Helliwell & Haifang Huang & Shun Wang, 2014. "Social Capital and Well-Being in Times of Crisis," Journal of Happiness Studies, Springer, vol. 15(1), pages 145-162, February.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. New Evidence on Trust and Well-being
      by maximorossi in NEP-LTV blog on 2016-09-06 01:21:12

    Citations

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    Cited by:

    1. Kirk Hamilton & John F. Helliwell & Michael Woolcock, 2016. "Social Capital, Trust and Well-being in the Evaluation of Wealth," NBER Working Papers 22556, National Bureau of Economic Research, Inc.
    2. Conzo, Pierluigi & Aassve, Arnstein & Fuochi, Giulia & Mencarini, Letizia, 2017. "The cultural foundations of happiness," Journal of Economic Psychology, Elsevier, vol. 62(C), pages 268-283.
    3. Leonardo Becchetti & Luca Corazzini & Vittorio Pelligra, 2018. "We Can Be Heroes. Trust and Resilience in Corrupted Economic Environments," CEIS Research Paper 429, Tor Vergata University, CEIS, revised 11 Apr 2018.
    4. Jesse Bricker & Geng Li, 2017. "Credit Scores, Social Capital, and Stock Market Participation," Finance and Economics Discussion Series 2017-008, Board of Governors of the Federal Reserve System (US).

    More about this item

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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