Trust, Inequality and Ethnic Heterogeneity

13 Pages Posted: 4 Aug 2006

See all articles by Andrew Leigh

Andrew Leigh

Australian House of Representatives Parliament House; Centre for Applied Macroeconomic Analysis, ANU; IZA

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Using a large Australian social survey, combined with precise data on neighbourhood characteristics, I explore the factors that affect trust at a local level (localised trust) and at a national level (generalised trust). Trust is positively associated with the respondent's education, and negatively associated with the amount of time spent commuting. At a neighbourhood level, trust is higher in affluent areas, and lower in ethnically and linguistically heterogeneous communities, with the effect being stronger for linguistic heterogeneity than ethnic heterogeneity. Linguistic heterogeneity reduces localised trust for both natives and immigrants, and reduces generalised trust only for immigrants. Instrumental variables specifications show similar results. In contrast to the USA, there is no apparent relationship between trust and inequality across neighbourhoods in Australia.

Suggested Citation

Leigh, Andrew, Trust, Inequality and Ethnic Heterogeneity. Economic Record, Vol. 82, No. 258, pp. 268-280, September 2006, Available at SSRN: or

Andrew Leigh (Contact Author)

Australian House of Representatives Parliament House ( email )

Canberra, 2600

Centre for Applied Macroeconomic Analysis, ANU ( email )

ANU College of Business and Economics
Canberra, Australian Capital Territory 0200

IZA ( email )

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