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The Effect of Neighbourhood Diversity on Volunteering: Evidence from New Zealand

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Abstract

An empirical literature has found that neighborhood heterogeneity lowers people's likelihood of contributing to public goods. We show that the estimated effect of any concave neighborhood characteristic on behavior may be biased when “large” rather than “small” neighborhoods are used. Large boundaries omit the effect of differences between small neighborhoods, biasing a characteristic's total effect even when the omitted differences lack economic effect. We next use three New Zealand census rounds to test whether volunteering rates are lowered by neighborhood heterogeneity by race/ethnicity, birthplace, income or language. We find boundaries matter, with only ethnic/racial heterogeneity robustly associated with lower volunteering.

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File URL: http://www.econ.canterbury.ac.nz/RePEc/cbt/econwp/0909.pdf
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Bibliographic Info

Paper provided by University of Canterbury, Department of Economics and Finance in its series Working Papers in Economics with number 09/09.

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Length: 47 pages
Date of creation: 14 May 2009
Date of revision:
Handle: RePEc:cbt:econwp:09/09

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Keywords: heterogeneity; neighbourhood effects; volunteering;

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  1. Alesina, Alberto & Baqir, Reza & Easterly, William, 1999. "Public goods and ethnic divisions," Policy Research Working Paper Series 2108, The World Bank.
  2. Erzo F.P. Luttmer, 1999. "Group Loyalty and the Taste for Redistribution," Working Papers 9902, Harris School of Public Policy Studies, University of Chicago.
  3. Andrew Leigh, 2006. "Trust, Inequality and Ethnic Heterogeneity," The Economic Record, The Economic Society of Australia, vol. 82(258), pages 268-280, 09.
  4. Gustavsson, Magnus & Jordahl, Henrik, 2008. "Inequality and trust in Sweden: Some inequalities are more harmful than others," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 348-365, February.
  5. La Ferrara, Eliana & Alesina, Alberto, 2000. "Participation in Heterogeneous Communities," Scholarly Articles 4551796, Harvard University Department of Economics.
  6. Miguel, Edward & Gugerty, Mary Kay, 2005. "Ethnic diversity, social sanctions, and public goods in Kenya," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2325-2368, December.
  7. Natalia Letki, 2008. "Does Diversity Erode Social Cohesion? Social Capital and Race in British Neighbourhoods," Political Studies, Political Studies Association, vol. 56, pages 99-126, 03.
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Cited by:
  1. John Gibson & Geua Boe-Gibson, 2014. "Capitalizing Performance of 'Free' Schools and the Difficulty of Reforming School Attendance Boundaries," Working Papers in Economics 14/08, University of Waikato, Department of Economics.
  2. James Alm & Jeremy Clark & Kara Leibel, 2011. "Socio-economic Diversity, Social Capital, and Tax Filing Compliance in the United States," Working Papers in Economics 11/35, University of Canterbury, Department of Economics and Finance.

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