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Incentives and Social Capital: Are Homeowners Better Citizens?

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  • Denice DiPasquale
  • Edward L. Glaeser

Abstract

Individuals invest in their local environments by volunteering, getting involved in local government, becoming informed about their political leaders, joining non-professional organizations and even gardening. Homeownership may encourage these investments because homeownership gives individuals an incentive to improve their community and because homeownership creates barriers to mobility. Using the U.S. General Social Survey document that homeowners are more likely to invest in social capital, and a simple instrumental variables strategy suggests that the relationship may be causal. While our results are not conclusive, we find evidence that a large portion of the effect of homeownership on these investments may come from lower mobility rates for homeowners. Using the German Socio-Economic Panel homeownership and citizenship controlling for individual fixed effects. Finally, across cities and counties, areas with more homeowners have lower government spending, but spend a larger share of their government budget on education and highways.

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Bibliographic Info

Paper provided by Harvard - Institute of Economic Research in its series Harvard Institute of Economic Research Working Papers with number 1815.

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Date of creation: 1997
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Handle: RePEc:fth:harver:1815

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  1. Oswald Andrew J., 1996. "A Conjecture on the Explanation for High Unemployment in the Industrialized Nations : Part I," The Warwick Economics Research Paper Series (TWERPS) 475, University of Warwick, Department of Economics.
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  5. James M. Poterba, 1997. "Demographic structure and the political economy of public education," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 16(1), pages 48-66.
  6. Epple, Dennis & Romer, Thomas, 1991. "Mobility and Redistribution," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 828-58, August.
  7. Glenn C. Loury, 1976. "A Dynamic Theory of Racial Income Differences," Discussion Papers 225, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
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