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Ethnic Diversity and Trust

Using data from U.S. states, I investigate the relationship between ethnic diversity and trust. I find a negative relationship between ethnic polarization and trust and a U-shaped relationship between ethnic fractionalization and trust. According to my estimations, (a) going from an ethnic polarization index (PI) of 0 to an ethnic PI of 1 decreases trust by almost 12% points; and (b) trust is minimized when the ethnic fractionalization index is equal to 0.34.