Assessing Trust Through Social Capital? A Possible Experimental Answer

Abstract

Trust is important in economics: several transactions are based on it; unfortunately it is difficult to measure. The recent economic literature on social capital shows a positive association between this concept and trust. As social capital is easier to measure than trust, this paper analyzes the possibility of assessing trust using a measure of social capital. A basic trust game is played in three Western European countries with undergraduate students; a questionnaire measures their level of social capital as time spent within social networks. This measure is stronger and more precise than the ones generally used. The use of an experiment instead of a questionnaire allows for constructing a measure of trust that is continuous in principle. Moreover, to play an experiment allows for observing the behavior of the participants better than by the means of a survey. The results are supportive of the fact that trust can be assessed through social capital, although the presence of a strong geographical effect has to be accounted for.