Abstract: We address two problems with how trust is frequently measured in economics. First, we highlight the importance of clearly identifying the target of trust, which when ignored can lead to inconsistencies between trust measures. Second, we note the importance of distinguishing trust from other closely related concepts, which when overlooked can result in imprecise findings. To overcome these limitations, we conduct an experiment using a new behavioral measure of trust – individuals’ willingness to pay to avoid being vulnerable to the target of trust – and vary the target of trust. To assess the accuracy of our behavioral measure, we also collect data on potentially confounding effects (i.e., altruism and risk aversion) and on attitudinal measures of trust. The results provide support for our method of measuring trust. Subjects discriminate based on perceived characteristics of different targets in determining whether to trust, in a manner consistent with trust elicited using attitudinal measures and with actual trustworthiness. We also find that risk aversion and altruism do not correlate highly with our measure of trust, and in fact altruism is negatively related to trust when comparing across targets.

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