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

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Author Info
Jeremy Clark () (University of Canterbury)
Bonggeun Kim

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Abstract

We make two contributions to the emerging empirical literature that identifies a negative relationship between neighbourhood heterogeneity by factors such as race, ethnicity, income etc., and individuals’ likelihood of contributing to public goods or trusting their neighbors. First, we show that studies that attempt to estimate the effect of a concave neighbourhood characteristic like heterogeneity on outcomes of interest may obtain biased results if they use small or large neighbourhood boundaries alone. Such approaches omit the effect of heterogeneity between small neighbourhoods, and can result in biased estimates of heterogeneity’s effects even when this “between heterogeneity” has no economic effect. Second, with this problem in view, we use two levels of neighbourhood cross section and panel data from the 1996, 2001 and 2006 censuses in New Zealand to test whether heterogeneity by race/ethnicity, birthplace, income or language negatively affect New Zealander’s probability of volunteering. We find that addressing neighbourhood size matters. We then find robust evidence that ethnic/racial neighbourhood heterogeneity is associated with lower volunteering rates. We also find some evidence that language, birthplace and household income heterogeneity lower volunteering rates, but the evidence is less robust, particularly for language and income.

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File URL: http://www.econ.canterbury.ac.nz/RePEc/cbt/econwp/0909.pdf
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Publisher 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: 48 pages
Date of creation: 18 Dec 2009
Date of revision:
Handle: RePEc:cbt:econwp:09/09

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Related research
Keywords: heterogeneity; neighbourhood effects; volunteering;

Find related papers by JEL classification:
D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
D64 - Microeconomics - - Welfare Economics - - - Altruism
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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  1. Erzo F. P. Luttmer, 2001. "Group Loyalty and the Taste for Redistribution," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 500-528, June. [Downloadable!] (restricted)
    Other versions:
  2. Andrew Leigh, 2006. "Trust, Inequality and Ethnic Heterogeneity," The Economic Record, The Economic Society of Australia, vol. 82(258), pages 268-280, 09. [Downloadable!] (restricted)
    Other versions:
  3. 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. [Downloadable!] (restricted)
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  4. 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. [Downloadable!] (restricted)
  5. Alesina, Alberto & Baqir, Reza & Easterly, William, 1999. "Public goods and ethnic divisions," Policy Research Working Paper Series 2108, The World Bank. [Downloadable!]
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  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. [Downloadable!] (restricted)
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