Estimating the Effect of Perceived Risk of Crime on Social Trust in the Presence of Endogeneity Bias
Social Indicators Research, Vol. 114(2), pp. 523-547
43 Pages Posted: 18 Oct 2012 Last revised: 26 Apr 2016
Date Written: October 18, 2012
This study aims to estimate the effect of perceived risk of crime on the social trust probability for Italian men and women, accounting for both observed and unobserved confounding. We use microdata collected by the Italian National Statistical Office for the year 2010 during a multi-scope survey of Italian households. The relationship under investigation is estimated after controlling for observed confounding by using a propensity score weighting approach. To control for both observed and unobserved confounding (better known as endogeneity), a semiparametric recursive bivariate probit approach is ultimately employed instead. Our findings show that the perceived risk of crime has a significant negative effect on the social trust probability regardless of gender and that endogeneity seems to be present for both genders. The paper represents the first such application in which the effect of interest is estimated accounting for the presence of endogeneity.
Keywords: average treatment effect on the treated, endogeneity, confounding, perceived risk of crime, propensity score weighting, semiparametric recursive bivariate probit, social trust
JEL Classification: C14, C35
Suggested Citation: Suggested Citation