The Explanation higher Trust Leads to Higher Income - Management Assignment Help

Assignment Task

Task
Q1?Conditional on other characteristics, there is a positive correlation between trust (as measured in the World Values Survey) and per capita income. This could be because higher trust leads to higher income, or because higher income leads to higher trust. Which of these two explanations is likely to be more important?

1. Background

The explanation 'higher trust leads to higher income' is likely to be more important.

There are countless discussions on the relationship between trust and per capita income, mainly through mathematical models that construct a relationship function, then quantify the analysis to obtain an accurate impact coefficient by using instrumental variables to address endogeneity. Algan & Cahuc (2010) draw on the inheritance of trust and use data on the trust of immigrants in the United States as an instrumental variable for trust in the country of origin, deriving the positive effect of trust on the per capita income. Brückner et al (2019) relied on the effect of oil prices on income and used oil prices as an instrumental variable for national income, deriving a positive relationship on trust for residents in Russia.

2. Comparison: from theory to reality

It is difficult to compare which explanation is more significant through mathematical models, because it is difficult to find a study that uses the same object, scope, and data to examine the interrelationship between the two variables separately. Perhaps it is time to move away from reliance on mathematical and theoretical models and compare the practical significance of the two explanations. This essay will analyse the importance of the two positive relationships for national development from the perspective of policymakers.

This Management Assignment has been solved by our Management Experts at My Uni Papers. Our Assignment Writing Experts are efficient to provide a fresh solution to this question. We are serving more than 10000+Students in Australia, UK & US by helping them to score HD in their academics. Our Experts are well trained to follow all marking rubrics & referencing style.
    

Be it a used or new solution, the quality of the work submitted by our assignment Experts remains unhampered. You may continue to expect the same or even better quality with the used and new assignment solution files respectively. There’s one thing to be noticed that you could choose one between the two and acquire an HD either way. You could choose new assignment solution file to get yourself an exclusive, plagiarism (with free Turnitin file), expert quality assignment or order an old solution file that was considered worthy of the highest distinction.