Do Trust and Trustworthiness Pay Off?
Are individuals who trust others better off than those who do not? Do trustworthy people prosper more than untrustworthy ones? We first pose these questions in a search model where individuals face repeated choices between trusting (initiating an investment transaction) and not trusting, and between being trustworthy (not stealing the investment) and cheating. We then derive predictions for the relationship between observed individual behavior, aggregate attitudes, and individual prosperity. Finally, we evaluate these predictions empirically using household-level data for eighteen (mostly developed) countries from the World Values Survey. We find that, on average, a trusting attitude has a positive impact on income, while trustworthiness has a negative impact on income. In addition, we find evidence of complementarity between these two attitudes and the aggregate levels of the complementary attitudes. Most strikingly, the payoff to being trustworthy depends positively on the aggregate amount of trust in a given country.
|Date of creation:||Sep 2002|
|Date of revision:|
|Publication status:||published as Slemrod, Joel and Peter Katuscak. "Do Trust and Trustworthiness Pay Off?," Journal of Human Resources, 2005, v40(3,Summer), 621-646.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joshua Angrist & Alan Krueger, 1998.
"Empirical Strategies in Labor Economics,"
98-7, Massachusetts Institute of Technology (MIT), Department of Economics.
- Parikshit Ghosh & Debraj Ray, 1996.
"Cooperation in Community Interaction Without Information Flows,"
Review of Economic Studies,
Oxford University Press, vol. 63(3), pages 491-519.
- Parikshit Ghosh & Debraj Ray, 1995. "Cooperation in Community Interaction Without Information Flows," Boston University - Institute for Economic Development 64, Boston University, Institute for Economic Development.
- Isacsson, Gunnar, 1999. "Estimates of the return to schooling in Sweden from a large sample of twins," Labour Economics, Elsevier, vol. 6(4), pages 471-489, November.
- Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, 1998.
"The Quality of Goverment,"
NBER Working Papers
6727, National Bureau of Economic Research, Inc.
- Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, . "The Quality of Government," Working Paper 19452, Harvard University OpenScholar.
- Andrei Shleifer & Robert W. Vishny, 1998. "The Quality of Government," Harvard Institute of Economic Research Working Papers 1847, Harvard - Institute of Economic Research.
- Tirole, Jean, 1994.
""A Theory of Collective Reputations" with Applications to the Persistence of Corruption and to Firm Quality,"
IDEI Working Papers
38, Institut d'Économie Industrielle (IDEI), Toulouse.
- Jean Tirole, 1996. "A Theory of Collective Reputations (with applications to the persistence of corruption and to firm quality)," Review of Economic Studies, Oxford University Press, vol. 63(1), pages 1-22.
- Tirole, J., 1993. "A Theory of Collective Reputations with Applications to the Persistence of Corruption and to Firm Quality," Working papers 93-13, Massachusetts Institute of Technology (MIT), Department of Economics.
- Alberto Alesina & Eliana La Ferrara, 2000. "The Determinants of Trust," NBER Working Papers 7621, National Bureau of Economic Research, Inc.
- Zak, Paul J & Knack, Stephen, 2001. "Trust and Growth," Economic Journal, Royal Economic Society, vol. 111(470), pages 295-321, April.
- Joseph G. Altonji & Rebecca M. Blank, .
"Race and Gender in the Labor Market,"
IPR working papers
98-18, Institute for Policy Resarch at Northwestern University.
- Avinash Dixit, 2003.
"On Modes of Economic Governance,"
Econometric Society, vol. 71(2), pages 449-481, March.
- Colm Harmon & Ian Walker, 1995.
"Estimates of the economic return to schooling for the United Kingdom,"
Open Access publications
10197/647, School of Economics, University College Dublin.
- Harmon, Colm & Walker, Ian, 1995. "Estimates of the Economic Return to Schooling for the United Kingdom," American Economic Review, American Economic Association, vol. 85(5), pages 1278-86, December.
- Edward L. Glaeser & David I. Laibson & José A. Scheinkman & Christine L. Soutter, 2000.
The Quarterly Journal of Economics,
Oxford University Press, vol. 115(3), pages 811-846.
- Card, David, 1999. "The causal effect of education on earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 30, pages 1801-1863 Elsevier.
- Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
- Danielson, Anders & Holm, Hakan J, 2002. "Trust in the Tropics? Experimental Evidence from Tanzania," Working Papers 2002:12, Lund University, Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:9200. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.