TY  - JOUR
AU  - Sapienza,Paola
AU  - Toldra,Anna
AU  - Zingales,Luigi
TI  - Understanding Trust
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 13387
PY  - 2007
Y2  - September 2007
UR  - http://www.nber.org/papers/w13387
L1  - http://www.nber.org/papers/w13387.pdf
N1  - Author contact info:
Paola Sapienza
Kellogg School of Management
Northwestern University
2001 Sheridan Road, Evanston, IL 60208
Tel: 847/491-7436
Fax: 847/491-5719
E-Mail: paola-sapienza@northwestern.edu

Anna Toldra
Northwestern University
2001 Sheridan Road
Evanston, IL  60208
E-Mail: a-ToldraSimats@northwestern.edu

Luigi Zingales
Booth School of Business
The University of Chicago
5807 S. Woodlawn Avenue
Chicago, IL 60637
Tel: 773/702-3196
Fax: 773/834-2081
E-Mail: luigi.zingales@ChicagoBooth.edu
AB  - 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' behavior 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 behavior, 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's behavior reflects both, we show that WVS-like measures capture mostly the belief-based component, while questions on past trusting behavior are better at capturing the preference component of trust.
ER  -