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Does Economic Prosperity Breed Trust?

Author

Listed:
  • Markus Brueckner

    (University of Queensland, Australia)

  • Alberto Chong

    (Georgia State University, USA)

  • Mark Gradstein

    (BGU)

Abstract

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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Suggested Citation

  • 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

    as
    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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    Cited by:

    1. Markus Brückner & Alberto Chong & Mark Gradstein, 2021. "National income and trust," Review of Development Economics, Wiley Blackwell, vol. 25(1), pages 293-314, February.

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    More about this item

    Keywords

    Generalized trust; national income; oil price shocks;
    All these keywords.

    JEL classification:

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

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