How stable are measures of trust? (with Guillaume Hollard, Fabien Perez and Inès Picard)

Trust is an important economic variable that may however be subject to measurement error, leading to econometric issues such as attenuation bias or spurious correlations. We use a test/retest protocol to assess idiosyncratic noise in the two main tasks that are used to elicit trust, namely survey questions and experimental games. We find that trust measures based on the trust game entail substantial measure-ment error (with up to 15\% of noise), while there is virtually no noise in stated trust measures. Given the specificity of our subject pool (students in a top Engineering school) and the short period of time between the test and the retest, we consider these percentages of noise as lower bounds. We also provide a sub-group analysis based on measures of cognitive ability and effort. We find substantial heterogeneity across sub-groups in trust-game behavior, but none for the survey questions. We finally discuss which measure of trust should be used, and the estimation strategies that can be applied to limit the effect of measurement error.