Do Trust and Trustworthiness Pay Off?

Abstract

Are individuals who trust others better off than those who do not? Do trustworthy people prosper more than untrustworthy ones? We formulate and, using data from the World Values Survey, empirically evaluate predictions about the relationship between an individual's income and his self-reported attitudes toward trust and trustworthiness, and predictions about how these relationships are mediated by the average level of trust and trustworthiness in the country. On average, exhibiting trust has a positive, while exhibiting trustworthiness has a negative impact on income. More strikingly, the payoff to being trustworthy increases with the average level of trust in a given country.