Working Paper: CEPR ID: DP6462
Authors: Paola Sapienza; Anna Toldra Simats; Luigi Zingales
Abstract: Several papers study the effect of trust by using the answer to the World Values Survey (WVS) question ?Generally speaking, would you say that most people can be trusted or that you can?t be too careful in dealing with people?? to measure the level of trust. Glaeser et al. (2000) question the validity of this measure by showing that it is not correlated with senders? behaviour in the standard trust game, but only with his trustworthiness. By using a large sample of German households, Fehr et al. (2003) find the opposite result: WVS-like measures of trust are correlated with the sender?s behaviour, but not with its trustworthiness. In this paper we resolve this puzzle by recognizing that trust has two components: a belief-based one and a preference based one. While the sender behaviour?s reflects both, we show that WVS-like measures capture mostly the belief-based component, while questions on past trusting behaviour are better at capturing the preference component of trust.
Keywords: trust; trust game; trustworthiness
JEL Codes: G10; G30; Z10
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| WVS question (C83) | belief-based trust (D83) |
| sender's expectations (D84) | amount sent in trust game (C79) |
| past trusting behavior questions (D91) | preference-based trust (D81) |
| risk aversion (D81) | sender's behavior in trust game (C72) |
| altruism (D64) | sender's behavior in trust game (C72) |
| homogeneous populations (R23) | correlation between WVS question and trustworthiness (C10) |
| heterogeneous populations (R23) | less correlation between WVS question and trustworthiness (C10) |