The role of cultural diversity in various aspects of society has been theoretically and empirically investigated. Prevailing measures of cultural diversity mainly focus on diversity of ethnicity, religion and language. However, there has been little discussion about diversity in human values. We construct cultural diversity measures based on human values and seek to examine its role in economic development. This thesis demonstrates the significance our measure plays in estimating the impact of formal institutions (rule of law) and informal institutions (respect for others) on economic performance.