Moral, Trust and Happiness - Why Does Trust Improves Happiness?

The mechanism of trust formation in a society has not been fully studied in a field of economics. Despite of this, the importance of trust in economic activity is recognized by many researchers such as Zak and Knack (2001). They examine the conditions for the society to generate the trust within members, and derive the relation between trust and growth of the economy.

In this paper, we develop the study of Zak and Knack by considering the relation between trust and happiness. In considering the relation between trust and happiness, the concept of social capital plays important role. As is argued by Petrou & Kupek (2007), social capital has been investigated as a source of the quality of social interaction. The level of social capital is determined by the degree of social and organizational trust. Empirically, Yip et al. (2007) show that better social capital have positive effects on people’s happiness, and trust affects health and well-being through pathways of social network and support.

Bjonskoy (2003) and Gundelach and Kreiner (2004) derived the similar results by using cross-national data. The important point for our analysis is that it is empirically shown that the happiness has positive correlation with trust level via the formation of social capital. Social capital has two roles: income growth and stability for low income, and security for high income. However, over-investment to social capital increases transaction cost in community.

In this paper, we conduct the multivariate regression analysis by using the data complied by the research project funded by JSPS (Japan Society for Promoting Science) in 2014. The data contains five countries data (Japan, US, France, UK, and Germany). This data includes information about the state of happiness and trust, in addition to various attribute information and personality.

The results of the analysis show that the degree of trust to the society increases the positive happiness such as feeling of attainment, and decreases the negative happiness such as anxiety or anger. It is shown that this tendency is similar in five countries, but there is some differences in the degree of effectiveness. For example, it is  stronger in Japan than that in the U.S.

These results have various implications to the understanding the importance of trust in a society. Since the trust is formed through the moral behavior, this reseach results suggest that there is some incentives for individuals to invest into moral.