Empirical Analysis of Generalized Trust in Modern Russia

Today the concept of trust plays an important role in economic theory, being, for example, a crucial part of the theory of transaction costs and one of the components of the individuals’ social capital. However, the study of trust cannot be called complete, since there is very little works devoted to the study of trust at the individual level, especially the lack of them is observed in Russia. Trust is at the heart of trade and investment, and especially it is important in the financial market where people part with their money in exchange for promises. And the most significant event in the financial sector all over the world over the past few decades has undoubtedly been the 2008 crisis. The Russian economy has also suffered several significant recessions in recent years, the most serious of which were the crises of 2008 and 2014. It would be interesting to check whether there was a trust change after these events in Russia. The current study has two purposes: the first one is to identify determinants of trust in modern Russia, the second is to check whether the economic crises of 2008-2009 and 2014-2015 affected the level of generalized trust with the assumption that only population of working age was affected. The study is based on the RLMS-HSE survey. For the purposes of this paper the random-effects ordered logistic models and difference-in-difference ordered logistic models are used.