Measuring trust in institutions and its causal effect

Penczynski, Stefan P. ORCID: https://orcid.org/0000-0001-5477-6830 and Santana, Maria Isabel ORCID: https://orcid.org/0000-0002-1710-5998 (2024) Measuring trust in institutions and its causal effect. Quantitative Economics, 15 (1). pp. 213-243. ISSN 1759-7331

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Abstract

We propose a novel way of measuring trust in institutions, which draws on the experimental method used to elicit time preferences. Our measure is provided in the meaningful metric of the subjective probability of trustworthiness of the trustee. In a lab-in-the-field setting in the Philippines, we measure trust in two different financial institutions. Additionally, we exploit exogenous variation in the eligibility for a future payment to examine whether a promise fulfilled by the institution increases trust and changes individual financial behavior. We find that eligible individuals significantly increase savings held with the institution.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > School of Economics
Faculty of Social Sciences > School of Global Development (formerly School of International Development)
UEA Research Groups: Faculty of Social Sciences > Research Groups > Behavioural Economics
Faculty of Social Sciences > Research Centres > Centre for Behavioural and Experimental Social Sciences
Faculty of Social Sciences > Research Groups > Behavioural and Experimental Development Economics
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Depositing User: LivePure Connector
Date Deposited: 07 Aug 2023 10:31
Last Modified: 04 Mar 2024 18:18
URI: https://ueaeprints.uea.ac.uk/id/eprint/92795
DOI: 10.3982/QE1914

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