Ethnic Diversity and Trust: New Evidence from Australian Data

18 Pages Posted: 5 Dec 2016

See all articles by Silvia Mendolia

Silvia Mendolia

University of Aberdeen

Alex Tosh

University of Wollongong - School of Accounting, Economics & Finance

Oleg Yerokhin

University of Wollongong - Department of Economics

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Date Written: December 2016

Abstract

This paper investigates the relationship between neighbourhood ethnic and linguistic heterogeneity and individuals’ local and generalised trust. A wide literature across economics and sociology has recognised the importance of trust in facilitating economic growth and development. We use fixed effects and instrumental variable regression and control for a wide set of individual and local area characteristics. Our results show that a 1 standard deviation increase in ethnic and linguistic fractionalisation is associated with a decrease in local trust of about 0.12 standard deviations, while we do not find any significant relationship between heterogeneity and generalised trust.

Suggested Citation

Mendolia, Silvia and Tosh, Alex and Yerokhin, Oleg, Ethnic Diversity and Trust: New Evidence from Australian Data (December 2016). Economic Record, Vol. 92, Issue 299, pp. 648-665, 2016, Available at SSRN: https://ssrn.com/abstract=2879684 or http://dx.doi.org/10.1111/1475-4932.12295

Silvia Mendolia (Contact Author)

University of Aberdeen ( email )

Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom
0044 1224 272182 (Phone)

Alex Tosh

University of Wollongong - School of Accounting, Economics & Finance

Northfields Avenue
Wollongong, NSW 2522
Australia

Oleg Yerokhin

University of Wollongong - Department of Economics ( email )

Building 40A, Level 2
Wollongong, NSW 2522
Australia

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